In December 2020; Governor Cuomo signed a law to simplify and improve the state's power of attorney form. Effective June 13, 2021, the new Power of Attorney (POA) will be used. This is great because this may allow for a less restrictive document! But there are a few changes in the new power of attorney that the notary should be aware of!
Substantial Compliance instead of Strict Compliance
Thanks to a bunch of YouTube videos and articles by the NYS Bar Association (link below); the new POA is considered “Substantial Compliance” instead of “Strict Compliance”. Basically, in my opinion, it appears that the old POA had room for no errors! If you misspelled a word or changed the pdf, then there would be issues in an agency accepting the document. “Substantial Compliance” allows for typographical errors with acceptance due to intent. So if there’s a misspelled word or when your PDF saves a word document and it replaces a letter with a character; it doesn’t make it null and void. So that seems great because I have definitely received documents to print and the formatting has altered a random word. So yay!
Attorney-in-Fact vs Agent
So from first-hand experience, many people who are acting as an agent feel uncomfortable writing or scripting the words attorney-in-fact because they feel they are misrepresenting themselves as an attorney. So now in the new form; the agent signing documents will now sign in script (yes cursive if possible) “(Name of Agent) as Agent for (Principal)” or "(Name of Principal) by (Name of Agent), as agent”. To me this makes sense and there are fewer words involved. Now, I know many attorneys use stamps with the terminology “attorney in fact” so I’m not sure if a document wouldn’t be accepted for having still stated “attorney-in-fact” and I have yet for an attorney or the Secretary of State for New York to clarify. From my non-legal background, it sounds like it should be okay.
This is what the law specifically states: https://www.nysenate.gov/legislation/laws/GOB/5-1507
This is actually very exciting to see! NYS now understands that just because you can’t physically sign doesn’t mean that you’re incompetent! In other states, this is referred to as “Signature by Proxy.” For example, I have signed POA with a person who has broken their hand or had severe Parkinson’s. Prior to the 2021 POA they were told they had to make a “mark” usually an x or some sort of line. But it wouldn’t really match any previous signature and it was often very difficult to get enough pressure on the paper to make an effective mark. And in my opinion, it was a bit degrading because I would have someone putting a pen in their mouth or using a limb to make a mark. Now, I can ask someone (not the agent) to sign the principal’s name. I didn’t read anywhere that the notary is unable to sign for the principal, as it is allowed in other states. Now I’ve called The National Notary Association, The NYS Bar Association, The NYS Senate, and The NYS Secretary of State; not one organization could clarify the guidance on properly performing this notarization. Looking at other US State's guidelines, this is how I would perform the notarization:
In script, “Signature affixed by (name of other individual) at the direction of (principal).”
I would include the individual’s name and information in my journal that affixed the signature. The individual could be the witness, notary, or another individual.
In the previous Power of Attorney from 2009, the articles that I have read stated that two witnesses were required if the “Gift Rider” was over $500. Now they’ve done away with that requirement but they do require two signatures for the witnesses. However, one of those witnesses can be the notary. Of course, as in the past, the second witness cannot be an agent and must be over the age of 18. I usually stay away from any direct family members or caretakers to be safe. See the direct information from the NYS Senate: https://www.nysenate.gov/legislation/laws/GOB/5-1504
The Principal and Agent during notarization are to be considered competent. The person should be over the age of 18 but I suppose if an individual was emancipated there would be an exception. In rare cases, I would contact the Secretary of State or NYS Bar Association to clarify as this seems to be in the legal advice territory.
Competency however is something that is really tricky because as a notary; you're often not trained in mental health to be able to effectively determine the competency of an individual. As an NYS Notary, there are a few guidelines I use but they're my own guidelines that are not listed on any government site.
Have a conversation with the person. Ask about their day, the weather, what are the documents they are signing, what is the address on the identification, etc. I really try to stay away from yes/no questions because often people who are hearing impaired or don’t speak English will just nod in agreement or say yes. So I don’t really take the rule of competency to mean whether I think the person is able to sign the documents so much as I’m making sure the person understands what I am saying to them and can understand the documents. If I feel that there is someone answering for the person or making them feel uncomfortable, I usually will ask the individual to step outside of the room or get us a pen so that I can speak to the signer privately.
(If a medical professional is present or a family member, this should be documented!)
In the event that I feel someone is signing a document under duress or in an inappropriate situation and I’m unsure how to proceed then I’m calling to report the incident and documenting the situation in my journal. (Read our upcoming post on competency, so that you can protect your signer and yourself!)
Additional Information to Know but Not Required
Statutory Short Form
Actually, I didn’t know what this meant until I started researching POA’s. I was always confused because attorneys always referred to the POA as a Short Form POA but it’s 7 pages!! What they actually mean is that items listed giving power are in the general scope of the authority. So from my non-legal background, I understand it to mean that the Statutory Short Form POA is not specifically stating each power being granted to the attorney. Most of the POA’s I’ve notarized tend to be the Short Form.
Acceptance of the POA by Third Parties
This is something that I find fascinating because I usually only notarize POA’s I don’t really deal with a POA after it’s been signed. However, it’s good to know just in case a client comes back to the notary stating that a POA was not accepted by a financial institution or any other organization. So in real estate transactions, the original POA in most cases needs to be recorded. Apparently, according to the NYS Bar Association, financial institutions would often reject the POA because of a multitude of reasons. Well, now the institution must respond with an acceptance/rejection of the POA within 10 days. If the document is rejected, the principal/agent can then provide an opinion of counsel. If they continue to reject the POA and don’t have a valid reason; the financial institution could be in big trouble and may have to pay the legal costs! This is really good for all my clients that use POA's to buy and sell property!
Modifications need to be made only in the sections that say “Modification”. No changes should be made to the document itself. There are choices that the principal should be aware of and initial or complete during the signing. This includes the Gift Rider ($500 to $5000), Successor Agent, Multiple Agents, Agent Compensation; Specific Powers/Instructions, The letters (A-P) need to be initial or just P which includes all of the A-0 that specify the powers being granted to the agent. If the signer looks confused and starts asking the notary questions; I ALWAYS ask them if they want to call their attorney or reschedule. It’s really important that the signer understands exactly what they’re signing and it’s surprising to me how many attorneys do not review the document prior to the notarization. Under no circumstance, should the notary advise the signer on what to mark, I really just want to make sure the signer is not unknowingly signing a blank document thinking it's completed. (Yes, that has happened!)
Tip: Usually when I’m notarizing; all of the modifications have already been completed.
It is not required for you to notarize the agent at the same time as the principal. Many people think the document must be notarized at the same time and it does not.
Not a Healthcare Proxy
I can’t count the times that when a person is singing a POA they in conversation are telling me that their agent can now make healthcare decisions for them. A POA per the attorney articles listed below all states that a POA is for financial purposes only although the POA can be used to pay healthcare-related costs. For healthcare decisions, the principal will need a Healthcare Proxy that will identify an agent to specifically make healthcare decisions.
Another misconception is thinking that the POA is valid upon death. IF ANY OF THOSE STATEMENTS ARE MADE, I REFER THEM TO CALL THEIR ATTORNEY ASAP! Usually, if the attorney has booked me to notarize, I will call the attorney while I have the signers and put the phone on speaker. It is very important to me that the principal knows and understands the document they are signing.
With that being said; at the beginning of every notarization, I say the same thing to everyone. "I am an NYS Notary Public; I am not an Attorney and cannot give you legal advice. If you have any questions or concerns; please do not hesitate to call your attorney."
If I ask the individual if they want an attorney and they refuse but appear to be competent and of free will; I will notarize the documents but I make a note in my journal that no attorney was consulted.
If I find that I still have questions notarizing the POA, I call or email the Secretary of State Department of Licensing. Their response time is usually within a few days if at all. I can also try the National Notary Association and thankfully I have a membership as it is needed. When all else fails, I just ask that the signer reach out to the attorney together. And if at any time I feel unsure; I document, document, document by noting it in my journal.
*DISCLAIMER: I'M NOT AN ATTORNEY AND THIS SHOULD NOT BE INTERPRETED AS LEGAL ADVICE. IF YOU NEED AN ATTORNEY PLEASE VISIT THE NYS BAR ASSOCIATION, NYC BAR ASSOCIATION, OR THE LEGAL AID SOCIETY. If I did make an error, please add it to the comment section or email and I will correct it. Thank you!