A power of attorney (POA) is a legally binding document in which one person, the “principal” in legal terminology, appoints another person, the “agent,” to accomplish some kind of legal task for them. The agent who has a POA might manage the principal’s property, make medical decisions for them, or complete financial transactions.
Although it can be uncomfortable to think about needing one, a POA may be an important part of every person’s estate plan. Anyone over 18 can have a POA prepared for them. However, It is a common starting point for people who are ready to begin making an estate plan and also need to address health care decisions that may arise at the end of a person’s life. But this is not the only use that can be made of a POA.
In Pennsylvania, a limited POA gives the agent control over the principal’s finances but the power is restricted to:
- Certain limited and defined areas of authority only;
- For only a limited period of time.
A principal would use a limited POA in a situation in which they expect to be unable to manage their own affairs for a specified period of time, after which they will be able to reassume control.
The colorfully named springing POA, gives the agent control of the principal’s finances only when certain defined criteria are met. For example, if the principal becomes incapacitated, the POA springs into effect but only during the principal’s incapacity. It is also possible to draft a durable POA with clauses that define certain powers as springing, while others are durable.
Why Do I Need a Power of Attorney?
As a person grows older and possibly approaches retirement, it is important to make sure that their estate is in order and that they have made sound legal provisions for what should happen to it when they pass. As part of the estate planning process, a person should consider granting a family member or close friend power of attorney over some of their decisions.
Once a principal has granted the power of attorney to a trustworthy relative or friend, that person should have the authority needed to protect the person’s interests if they become unable to make decisions on their own behalf. Below are some basic rules and tips regarding the use of a POA Pennsylvania.
One important type of POA in Pennsylvania is the durable power of attorney. It is also referred to as a “health care power of attorney.” These are often prepared for elderly people or people who know they have a terminal illness, but arguably every adult should have one. They should be prepared before they are needed, i.e., before the principal is no longer competent to make a POA. The term “durable” refers to the fact that it remains valid after the maker of it becomes incapacitated.
In Pennsylvania, the durable power of attorney is used specifically for health care decisions. It can also be written to give the person who has the POA the ability to make financial decisions or both. Some states require separate documents, but Pennsylvania durable power of attorney law allows the principal to list specific powers, which may involve decision-making about both health care and financial matters. It is also possible under Pennsylvania law to draft a durable POA with clauses that define certain powers as “springing.”
But these are not the only situations in which a POA can be useful. There are any number of situations in which a person might make use of a POA. For example, perhaps an important real estate transaction needs to be completed at a time when the principal cannot be available to complete it. A POA may solve this problem.
What Powers Does a Durable Power of Attorney Confer on the Principal?
A durable power of attorney authorizes the one who is granted the POA to authorize the principal’s admission to a medical facility. In addition, the one who has the POA has the legal authority to enter into agreements for the principal’s care and to consent, arrange, and authorize medical and surgical procedures including the administration of drugs.
How Should I Choose an Agent to Have My POA?
As the principal, the person should appoint an agent who has the ability to make the decisions specified in their agreement and is going to know what the principal would want them to do.
So, for example, if a principal does not want to be kept alive using extreme measures or artificial means, they would choose an agent who knows this and can be trusted to respect the principal’s wishes in this regard.
The agent may be called upon to make very significant medical decisions, so it is important to pick a person whom the principal trusts to make decisions on their behalf that align with the principal’s goals and wishes.
Does a POA Have to Be in Writing?
Per Pennsylvania law, all POA documents must be in writing and signed by the principal and the agent. It must be witnessed by two adult witnesses and notarized.
Also, the beginning of the POA document needs to contain the specific statutory language found in Title 20, Section 5601(c) of the Pennsylvania Consolidated Statutes. Also, the language of Section 5601(d) should appear at the end of the document.
The document should also state the beginning and end dates of the agent’s power of attorney, if there is an end date. There may not be an end date for a durable POA, for example. Having one, however, in some cases, can protect the principal from any inappropriate assertion of power by an agent acting outside of their authority.
Should I Discuss the Agreement with Your Agent
Before signing the power of attorney forms, a principal should go over, in detail, all aspects of the agreement with their agent-to-be. The agent may not be comfortable with all of the authority the principal intends to grant to them, and the document can be tailored to fit both the needs of the principal and the agent. Also, the principal wants to communicate their goals and intentions to their agent.
Does a POA Have to Be Signed?
As noted above, in Pennsylvania, a POA is not legally effective until both the principal and the agent sign the document. In addition, it must be signed by two witnesses and notarized. The witnesses must be over 18 years old. The principal does not need to file this form with any agency.
However, while not required, a POA may be filed with the clerk of the Orphan’s Court Division of the Court of Common Pleas in the county where the principal lives. If the POA delegates authority for real estate transactions and is notarized, it may also be recorded in the county office for recording deeds.
Filing or recording a POA is a good idea, because it is then accessible in a public place and is a matter of public record.
Do You Need an Attorney’s Help with a POA?
It is not necessary to use an attorney to fill out power of attorney forms, however consulting an experienced Pennsylvania estate lawyer can make the process easier and less time consuming. More importantly, consulting an attorney ensures that the POA is prepared properly and complies with all of Pennsylvania’s legal requirements.
Moreover, an attorney can ensure that your POA serves your specific purposes and is not based on some online template that may not contain the provisions you want. A Pennsylvania estate lawyer can draft a tailored POA in a way that best achieves your goals and protects your interests.