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  

executed in New York State by and on behalf of an individual on or after September 1, 2009, must:

Statutory Legends and Irrevocable Powers of Attorney

  • 1.

    be typed or printed in no less than twelve point font;

  • 2.

    be signed by the principal and the agent, and have their respective signatures notarized (the principal and agent need not sign at the same time or place); and

3. contain the exact text of mandatory legends set forth in the Amendments, which are addressed to the principal and the agent.

New powers of attorney executed by entities (by individuals on behalf of entities) are not subject to the new requirements described above.

Scope of Amendments

Another source of uncertainty created by the Amendments involves irrevocable powers of attor- ney frequently used in commercial contexts. Unlike a typical power of attorney, which may be revoked by the principal at will, an irrevocable power of attorney may not be revoked by the principal. Irrevocable powers of attorney are well established under New York State agency law and are found frequently in commercial documents including security agreements and organizational agreements of entities.4 The Amendments require all powers of attorney executed by an individual in New York State on or after September 1, 2009, including irrevocable powers of attorney and non- statutory powers of attorney, to contain statutory legends set forth in the Amendments, which state that the principal may revoke such power of attor- ney at any time.5

One of the principal difficulties with the Amendments is that they are drafted broadly, encompassing all powers of attorney without limi- tation to the financial and estate planning context for which they were intended.3 Consequently, powers of attorney in partnership or limited liability company agreements, subscription booklets of funds, individual guarantees, and any number of other written appointments of an agent may fall within the scope of the Amendments.

Although the purposes of the Amendments pro- vide some indication of the intended scope of their application, without specific limiting language in the statute itself, many commercial powers of attor- ney executed after the Amendments took effect may be vulnerable to challenge for not meeting the new requirements.

Automatic Revocation of Powers of Attorney

Revocable powers of attorney typically may be revoked by express notice from the principal to the agent and to any third party that the principal has reason to believe has received or relied on the power of attorney. The Amendments provide that unless the principal expressly provides otherwise, execution of a new power of attorney revokes any and all prior powers of attorney executed by the principal.6

This provision is highly problematic. For exam- ple, an individual who executes a power of attorney with respect to an investment account authorizing an investment adviser to make trades on the indi- vidual’s behalf may unknowingly revoke such power of attorney by later executing a separate

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