# What Is A Monitor > Insight about monitors under a Power of Attorney in New York Source: https://wiki.powersofattorney.com/monitor · Updated 2 February 2023 - [**In New York**, a principal **may appoint a monitor**](https://wiki.powersofattorney.com/monitor#in-new-york-a-principal-may-appoint-a-monitor) - [**Use** for a monitor](https://wiki.powersofattorney.com/monitor#the-role-of-a-monitor-may-be-expanded) - [**Outside New York**](https://wiki.powersofattorney.com/monitor#the-role-of-a-monitor-may-be-expanded) - [**The role** of a monitor **may be expanded**](https://wiki.powersofattorney.com/monitor#the-role-of-a-monitor-may-be-expanded) - [**Special purpose** solutions](https://wiki.powersofattorney.com/monitor#special-purpose-solutions) - [A monitor **does not have a positive duty to act**](https://wiki.powersofattorney.com/monitor#a-monitor-does-not-have-a-positive-duty-to-act) - [Imposing a **positive duty to act & supevision**](https://wiki.powersofattorney.com/monitor#imposing-a-positive-duty-to-act-supervision) - [**Issues** to consider](https://wiki.powersofattorney.com/monitor#imposing-a-positive-duty-to-act-supervision) ## In New York, A Principal May Appoint A Monitor In **New York**, a [principal](https://wiki.powersofattorney.com/principal#the-principal-is-the-entity-that-makes-the-power-of-attorney) in respect of a *Power of Attorney* for a person[^1] may identify a [monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor), or multiple [monitors](https://wiki.powersofattorney.com/monitor#what-is-a-monitor) , with authority to request records of “*receipts, disbursements, and transactions*” from an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) ([§5-1509](https://www.nysenate.gov/legislation/laws/GOB/5-1509)).[^2] [§5-1501](https://www.nysenate.gov/legislation/laws/GOB/5-1501) defines a “[monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor)” as follows: *“a person… who has the authority to request, receive, and seek to compel the agent to provide a record of all receipts, disbursements, and transactions entered into by the agent on behalf of the principal”.* A [monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor) is not mentioned in the [legislation](https://wiki.powersofattorney.com/legislation#the-legislation-governs-powers-of-attorney-for-persons) of the other five (5) of the [Six (6) Greater States](https://wiki.powersofattorney.com/introduction#ca-tx-ny-fl-il-and-pa)*.* On one view, [§5-1501](https://www.nysenate.gov/legislation/laws/GOB/5-1501) defines the limits of authority of a [monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor) appointed under [§5-1501](https://www.nysenate.gov/legislation/laws/GOB/5-1501). ## Use For a Monitor Accepting that a [non-durable](https://wiki.powersofattorney.com/typescommonlyusedpersons#non-durable-powers-of-attorney) *Power of Attorney* assumes that the [principal](https://wiki.powersofattorney.com/principal#the-principal-is-the-entity-that-makes-the-power-of-attorney) has [capacity](https://wiki.powersofattorney.com/capacitytexas#capacity-refers-to-ability-to-manage-ones-own-affairs) it seems more likely a [monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor) would be appointed under a [durable](https://wiki.powersofattorney.com/typescommonlyusedpersons#a-durable-power-of-attorney-operates-if-the-principal-lacks-or-may-lack-capacity) *Power of Attorney*. Appointing a [monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor) has cost implications. A [principal](https://wiki.powersofattorney.com/principal#the-principal-is-the-entity-that-makes-the-power-of-attorney) might for example, [direct](https://wiki.powersofattorney.com/directionwhatis#a-direction-regulates-the-core-terms-of-a-power-of-attorney) that any auditing by a [monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor) only occur if the [principal](https://wiki.powersofattorney.com/principal#the-principal-is-the-entity-that-makes-the-power-of-attorney) lacks [capacity](https://wiki.powersofattorney.com/capacitytexas#capacity-refers-to-ability-to-manage-ones-own-affairs), however this approach involves more risk. Wide-ranging auditing seems more likely to reduce any risk of unscrupulous conduct on the part of an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal). ## Outside New York A [principal](https://wiki.powersofattorney.com/principal#the-principal-is-the-entity-that-makes-the-power-of-attorney) in any of the other five (5) of the [Six (6) Greater States](https://wiki.powersofattorney.com/introduction#ca-tx-ny-fl-il-and-pa) might identify an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) with wide auditing powers, including authority of the kind held by a [monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor). ## Expanding The Role of a Monitor Forming a view as to the bona fides of the conduct of an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) may require access to records in addition to receipts, disbursements, and evidence of transactions, including: - records of appointments, [resignations](https://wiki.powersofattorney.com/termmng#renouncement-resignation), [renouncements](https://wiki.powersofattorney.com/termmng#renouncement-resignation) etc. - tax lodgements - correspondence, file notes, calculation sheets, etc. - advice from third parties (including legal and accounting advice) - evidence of relevant negotiations - medical records A [principal](https://wiki.powersofattorney.com/principal#the-principal-is-the-entity-that-makes-the-power-of-attorney) in respect of a *Power of Attorney* for a [person](https://wiki.powersofattorney.com/terms#meaning-of-person-ie-natural-person)[^3] in **New York** may want to define a role for an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) that includes authority to access records of the kind referred to above in conjunction with authority audit the [principal’s](https://wiki.powersofattorney.com/principal#the-principal-is-the-entity-that-makes-the-power-of-attorney) affairs. ## Reciprocal Obligations Upon Agents Supervisory schemes may include obligations upon the [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal), [directing](https://wiki.powersofattorney.com/directionwhatis#a-direction-regulates-the-core-terms-of-a-power-of-attorney) an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) to answer questions from a supervisor. In time, we may see service providers specializing in the taking of audit-related authority under *Powers of Attorney*, perhaps suitably qualified accountants with appropriate professional indemnity insurance, to add another layer of protection. ## Auditing As A Deterrent Supervisory functions serve a purpose beyond the purely functional. Extensive audit powers in conjunction with *Powers of Attorney* present a serious disincentive for any [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) who might be tempted to act unscrupulously. Compare these three designs:- - regular auditing monthly - auditing at the election of an agent - no auditing Even where auditing might be irregular or uncertain as in the second example above, it is nonetheless a significant deterrent. Inclusion of audit processes may shift any perception of the part of an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) that anything might go unnoticed. ## A Monitor Does Not Have A Positive Duty To Act It appears that a [monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor) in **New York** is not subject to a [positive duty to act](https://wiki.powersofattorney.com/agentoblig#an-agent-may-not-have-a-positive-duty-to-act). [§5-1505](https://www.nysenate.gov/legislation/laws/GOB/5-1505) contains the only reference in the [legislation](https://wiki.powersofattorney.com/legislation#the-legislation-governs-powers-of-attorney-for-persons) to imposition of a [positive duty to act](https://wiki.powersofattorney.com/agentoblig#an-agent-may-not-have-a-positive-duty-to-act) and speaks of an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) acting “*according to any instructions from the principal or, where there are no instructions, in the best interest of the principal…*” If an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) was appointed as a [monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor) the position may be different, although an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) already has extensive powers under [§5-1508](https://www.nysenate.gov/legislation/laws/GOB/5-1508) “*to request, receive and seek to compel a co-agent or predecessor agent to provide a record of all receipts, disbursements and transactions entered into by the agent on behalf of the principal.*” > [§5-1505](https://www.nysenate.gov/legislation/laws/GOB/5-1505) provides: > > *"In dealing with property of the principal, an agent shall observe the standard of care that would be observed by a prudent person dealing with property of another*… > > … *an agent acting under a power of attorney has a fiduciary relationship with the principal…* > > *The fiduciary duties include but are not limited to each of the following obligations…* > > *… to act according to any instructions from the principal or, where there are no instructions, in the best interest of the principal, and to avoid conflicts of interest…"* ## Imposing A Positive Duty To Act A [prudent principal](https://wiki.powersofattorney.com/principal#being-a-prudent-principal-is-encouraged) might require a [monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor) to promise to perform their supervisory functions. For example, a [principal](https://wiki.powersofattorney.com/principal#the-principal-is-the-entity-that-makes-the-power-of-attorney) might enter a separate agreement with a [monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor) under which they agree to perform their functions. ## Issues To Consider Issues likely to attract attention in terms dealing with a [monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor) or any [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) with supervisory functions include:- - frequency and scope of audit processes - review of terms of audit processes - checks to ensure audit processes completed Risk management a multi-level process, including review of the risk management process itself. What is done, what is available to consider when it is done, when it’s done, confirming it was done, reviewing what is done. Simply appointing someone to ‘review the accounts every three (3) years’ would not be ideal to manage the risks. [^1]: Being not a *Power of Attorney* excluded from the ambit of the [legislation](https://wiki.powersofattorney.com/legislation#the-legislation-governs-powers-of-attorney-for-persons) - [click here](https://wiki.powersofattorney.com/legislation#exclusions) to read more. [^2]: There is space in the [government form](https://wiki.powersofattorney.com/governmentforms#government-forms-in-ca-tx-ny-il) to identify a [monitor](https://wiki.powersofattorney.com/monitor#what-is-a-monitor) in **New York** (see [§1513(i)](https://www.nysenate.gov/legislation/laws/GOB/5-1513)). [^3]: Being not a *Power of Attorney* excluded from the ambit of the [legislation](https://wiki.powersofattorney.com/legislation#the-legislation-governs-powers-of-attorney-for-persons) - [click here](https://wiki.powersofattorney.com/legislation#exclusions) to read more.