Through its passage of Chapter 340 of the Laws of 2010, the New York Legislature significantly amended the laws relating to powers of attorney. Many of the amendments, such as those affecting powers of attorneys for co-ops and condominiums, stock proxies, powers within LLC and partnership agreements and powers given to government agencies, although very important, do not affect the daily and usual work which title insurance companies perform. However, the Legislature made some changes which affect how title companies underwrite transactions where the agent (or donee of the power) makes a gift on behalf of the principal (or donor of the power). The changes most relevant to title companies appear in Sections 5-1513 and 5-1514 of the General Obligations Law and take effect on September 12, 2010. The changes affect how we treat situations where the agent or donee is using the principal or donor’s power of attorney to make a no-consideration or (very little consideration) transfer of title. Please note the following.
1. The Legislature re-named the old (Since 2009) Statutory Major Gifts Rider to “Statutory Gifts Rider”.
2. Whenever a power attorney is used in a no-consideration transfer of title, the principal/ donor of the power must have executed the Statutory Gifts Rider.
3. To comply with the new law and to enable the donee of the power to make a gift; that is, a transfer for no or little consideration, the principal/ donor must have executed two sections of the new form power of attorney.
First, the donor/principal must initial Section (h) within the power of attorney itself,-“Certain Gifts Transactions: Statutory Gifts Rider (Optional)”.
Second, the donor/principal must execute the Statutory Gifts Rider Authorization attached to the form power of attorney. Within the Statutory Gifts Rider Authorization, the donor/principal must initial one of the gifting authorizations which the donor wishes to give to the donee/agent. The authorization are (a) limited authority to make gifts which do not exceed the federal gift tax exclusion amount limits (currently $13,000.00); (b) gifts above or below the federal tax exclusion amounts and (c) Grant of Specific Authority for and Agent to make Gifts to Himself or Herself; (Optional).
If the donee/agent is using the power to make a no consideration transfer of real property to a third party, the donor/principal of the power then, the donor must have initialed section (b) of the Statutory Gifts Rider. Here, we are assuming that the value of most New York real property exceeds the federal gift tax exclusion (currently, $13,000).
If the donee/agent is using the power to make a gift to himself or herself, then the donor/principal of the power must have executed Section (c) of the Statutory Gifts Rider.
4. The donor/principal’s signature on the Statutory Gift Rider must be acknowledged as well as his or her signature on the power of attorney itself.
5. Two people must witness the donor/principal execution of the Statutory Gifts Rider. The person notarizing the donor/principal’s signature may one of the witnesses. Note that the witnesses are required to date their signatures, print their names, and insert their addresses.
6. The new Power of Attorney law takes effect on September 12, 2010. However, powers of attorney executed before that date are still valid.
7. The foregoing requirements do not affect transactions where powers of attorney are used in for consideration transactions.
1. The Legislature re-named the old (Since 2009) Statutory Major Gifts Rider to “Statutory Gifts Rider”.
2. Whenever a power attorney is used in a no-consideration transfer of title, the principal/ donor of the power must have executed the Statutory Gifts Rider.
3. To comply with the new law and to enable the donee of the power to make a gift; that is, a transfer for no or little consideration, the principal/ donor must have executed two sections of the new form power of attorney.
First, the donor/principal must initial Section (h) within the power of attorney itself,-“Certain Gifts Transactions: Statutory Gifts Rider (Optional)”.
Second, the donor/principal must execute the Statutory Gifts Rider Authorization attached to the form power of attorney. Within the Statutory Gifts Rider Authorization, the donor/principal must initial one of the gifting authorizations which the donor wishes to give to the donee/agent. The authorization are (a) limited authority to make gifts which do not exceed the federal gift tax exclusion amount limits (currently $13,000.00); (b) gifts above or below the federal tax exclusion amounts and (c) Grant of Specific Authority for and Agent to make Gifts to Himself or Herself; (Optional).
If the donee/agent is using the power to make a no consideration transfer of real property to a third party, the donor/principal of the power then, the donor must have initialed section (b) of the Statutory Gifts Rider. Here, we are assuming that the value of most New York real property exceeds the federal gift tax exclusion (currently, $13,000).
If the donee/agent is using the power to make a gift to himself or herself, then the donor/principal of the power must have executed Section (c) of the Statutory Gifts Rider.
4. The donor/principal’s signature on the Statutory Gift Rider must be acknowledged as well as his or her signature on the power of attorney itself.
5. Two people must witness the donor/principal execution of the Statutory Gifts Rider. The person notarizing the donor/principal’s signature may one of the witnesses. Note that the witnesses are required to date their signatures, print their names, and insert their addresses.
6. The new Power of Attorney law takes effect on September 12, 2010. However, powers of attorney executed before that date are still valid.
7. The foregoing requirements do not affect transactions where powers of attorney are used in for consideration transactions.
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