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What you need to know for 08/18/2017

Editorial: Simplify power of attorney

Editorial: Simplify power of attorney

Forms are too complex, full of traps for unwary citizens
Editorial: Simplify power of attorney
Photographer: Shutterstock

How much more boring can you get than legislation to simplify a state form?

But those who have ever had to deal with a relative over the state’s complex and often-confusing system for determining power of attorney might not find the issue such a snoozer — especially when banks and other financial institutions refuse to honor the documents because they’re not filled out perfectly.

Legislation being supported in the state Legislature by the New York State Bar Association would simplify the forms, ease up on restrictions that the documents be worded in exactly one way, and sanction institutions that unreasonably refuse to accept a legitimate power-of-attorney form.

Power of attorney comes into play when someone must assume legal authority from another in order to care for them or when someone must authorize someone else to conduct business on their behalf when they can’t appear in person.

For instance, an adult son or daughter might need to assume power of attorney for an elderly parent in declining health to make sure their affairs are taken care of and that legal decisions that need to be made on their behalf are carried out in accordance with their wishes. Sometimes, power of attorney is needed to ensure that someone’s bills get paid while they’re on an extended hospital stay. Sometimes, the participants in a transaction can’t appear in person to sign the paperwork. So they designate power of attorney.

Giving power of attorney is a common practice. But according to a Bar Association report issued last year, the forms in New York are “unduly burdensome” and “full of traps for the unwary.”
The current forms contain multiple sections, requiring individuals to obtain a variety of verifications.

If you don’t prepare these complex forms exactly to the letter, it can lead to severe, unexpected repercussions that might occur well after the signing of the documents. Even a typographical error can compel some financial institutions to reject a form.

Because of the complexity of the current forms, some financial institutions forgo the state documents and only accept their own power-of-attorney forms, which makes the process more burdensome, confusing and time-consuming for the average person.

Legislation would help fix this mess, in that it would simplify the current power-of-attorney forms and prohibit banks from improperly refusing a valid form.

The NYSBA report also recommended that judges be allowed to award damages, including legal fees and other costs, when a financial institution “acted unreasonably” in refusing a legitimate short-form power of attorney.

If there’s no penalty, companies will just keep doing what they’re doing and denying legitimate power-of-attorney forms.

This legislation is solely designed to benefit ordinary people who find themselves in difficult family and legal situations.

Lawmakers need to wake up and get this done.

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