Power of Attorney Guide

It is not uncommon for clients to use Power of Attorney documents (POAs) to delegate authority to another person for the purpose of legally conducting business on their behalf. Below you will find pertinent information to help you assist your client in using POAs to administer various functions on their New York Life Annuity. However please note that neither New York Life, nor its’ employees can assist in any way in setting up a POA or in giving any advice regarding a POA. If your client is considering setting up a Power of Attorney they should seek the assistance of an attorney.

First some basic information to be familiar with:

• The person who grants the POA is called the Principal.
• The person to whom the authority is granted is called the Agent or the Attorney in Fact (AIF).

Why do individuals set up Power of Attorneys? Some reasons include:

• The POA is commonly used to make property, financial, medical and other legal decisions. A POA is helpful in avoiding the expense of having a court appoint a Guardian if a person should become incapacitated or incompetent.
• Also, a person may give POA authority to another person if they will be away for an extended period. For example, a person who travels south for the winter may give POA authority to another person to handle business transactions while they are away.

It is also important to understand if your client set up a durable or non-durable of Power of Attorney.

• Durable POAs enable the Attorney in Fact to act for the Principal even after the Principal is not mentally competent or physically able to make decisions. The Durable POA may be used immediately, until it is revoked by the Principal, or until the Principal’s death.
• Nondurable POAs take effect immediately and remain in effect until they are revoked by the Principal or until the Principal becomes mentally incompetent or dies. It is often used for a specific transaction, like the closing of a sale on a residence, or the handling of the Principal’s affairs while he/she is traveling outside of the country.

Why is this important? For example if your client becomes confined to a nursing home due to no longer being mentally competent and a family member has a POA they would only be able to conduct transactions on behalf of the principal if it was a durable power of attorney. It the client had set up a nondurable POA their Attorney in Fact would not be able to use the POA documents to conduct business for the principal.

Other considerations regarding the type of Power Attorney include, but are not limited to:

• A Springing POA becomes effective at a future time. That is, it “springs up” upon the happening of a specific event chosen by the Principal. Often that event is the illness or disability of the Principal. The Springing POA will frequently provide that the Principal’s physician will determine whether the Principal is competent enough to handle his/her financial affairs. This type of POA remains in effect until the Principal’s death or until revoked by a court.
• A Medical Power of Attorney is a document signed by a Principal designating a person to make health care decisions on the Principal’s behalf.

Important Note: A POA for Health Care will not be acceptable for New York Life Annuity purposes. These types of POA authorizations do not allow for financial transactions to be carried out on behalf of the client, just health care decisions. Please make sure to read the POA documents.

Additional Considerations

• A POA terminates upon death.
• It is rare for a trust owned policy to have a POA. The POA documents would need to have specific verbiage concerning the trustee and the POA for this to be allowed.
• With any type of power of attorney, the powers granted terminate upon revocation. There may, however, be language in the power of attorney or specific state law that holds persons or institutions harmless, or not liable, when they act in good faith on a power of attorney if they received no notice of its revocation. A revocation of a power of attorney should be in writing and signed by the principal and provided to the principal’s financial institutions or other parties with whom he transacts business.

Sending in Power of Attorney documents to New York Life

In order to best assist clients when they send in Power of Attorney documents please note the following requirements:

• We need a copy of the POA paperwork, indicating who are the Principal and Attorney in Fact.
• All signatures need to be present on the form and for a Springing POA, we need the trigger event, as stated in the POA document, i.e. a physician’s statement advising the principal is incapacitated for the POA to be in good order.
• Make sure the policy number, policy owner, social security number, and address are included on the applicable service form (i.e. partial withdrawal form).
• There are some states that have Short Form Power-of-Attorney, which we will accept as well. The short form means the state has a written model form for a POA situation.
• The Principal can continue to make legal and financial decisions for him/herself, after naming a POA, if the Principal has the retained ability to make decisions.
• A Principal can revoke his/her Power of Attorney If this occurs, we would need to receive a copy of the Revocation for our files.
• Certain states require the Notary Seal or Stamp. If a notary stamp is required and not visible, the request will be rejected. Please contact our service center for further state specific information if you are unsure about the requirements for your clients’ state.
• If multiple attorneys-in-fact are named, NYL needs to know if they must act together /jointly or are allowed to act separately /severally / individually. This should be stated explicitly in the POA document.
• If the Attorney in Fact is sending in the POA documents in order to conduct a specific transaction the POA document must specifically grant the Attorney in Fact permission to perform that type of transaction. For example, it is common that an AIF has ability to perform financial transactions but they are not granted power to change the ownership on the policy or change the beneficiaries on the policy. Another common example is clause whereby the Attorney in Fact does have the power to change beneficiaries but they are not allowed to change the beneficiary to themselves.

Please note that every Power of Attorney document may have individual differences to the generic examples shown above. And we may have additional requirements depending upon the documents presented and the exact nature of any request.

For further information please contact our Customer Service Center at 800-762-6212.

Neither New York Life Insurance Company, nor its agents, provides tax, legal, or accounting advice. Clients should consult their own tax, legal, or accounting professional before making any decisions.

For Financial Professional Use