New York Adopts Amendments to Power of Attorney Statute
On August 13, 2010, Governor Paterson signed into law certain technical amendments to New York’s power of attorney statute. These amendments clarify and restrict the application of the sweeping power of attorney statute that went into effect on September 1, 2009, which, while designed to protect the elderly and incapacitated in the context of estate planning, on its face applied to powers of attorney granted in business and commercial transactions, including powers of attorney typically granted by investors to fund managers in subscription documents, partnership agreements and other contracts. Fund managers with New York-based investors had faced the choice of either foregoing standard powers of attorney or complying with the onerous formalities of, and accepting the fiduciary duties imposed by, New York’s power of attorney statute. The latest amendments clarify that fund managers will not be subject to the 2009 statute. Specifically, they exclude powers of attorney given for a business purpose or pursuant to a partnership agreement or limited liability company operating agreement from application of the 2009 statute.
The amendments are effective as of September 12, 2010 and apply retroactively to September 1, 2009.