Power of Attorney Issues

• Author: Seymour Goldberg
• Profession: Senior partner in the law firm of Goldberg & Goldberg, P.C., in Woodbury, New York
• Pages: 164-165

164

POWER OF ATTORNEY

ISSUES

A properly executed power of attorney should have provisions concern-

ing retirement benefit tra nsactions. This should be considered in devel-

oping an estate plan for an individual who has retirement assets such as

an IRA.

A typical state statute enumerates the powers bestowed upon the

agent by the principal. The following is taken from New York General

Obligations Law section 5-1502L:

To contribute to, withdraw from and deposit f unds in any type

of retirement benefit or plan (including, but not limited to, any

tax qualif ied or nonqualified pension, profit sharing, stock bonus,

employee savings and retirement plan, deferred compensation

plan, individual retirement account, or any public pension fu nd or

retirement system).

According to the statute, t he agent may also:

[M]ake investment directions, to select and change payment

options, and to exercise any other election for the principal with

regard to any retirement benefit or plan in which the principal has

an interest. . . .

Under New York law, the holder of the power cannot select or change

ben efi ciar ies of ret ire ment accou nts unl ess i t is s pec ific all y aut hor ized in

a separate document known as a Stat utory Major Gifts Rider.

In New York State the statute provides for rollovers but a separate

form must be executed for the selection of the beneficia ries of the roll-

over account. The following is taken from New York General Obliga-

tions Law section 5-1502L and authorizes the agent “[t]o make rollover

contributions from any ret irement benefit or plan to other retirement

benefits or plans”:

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