Power of Attorney

Pennsylvania Power of Attorney Lawyer

Powers of attorney (POAs) are an essential document in planning for a client’s potential incapacity and/or long-term care needs. It is a key document as part of a comprehensive estate plan and/or elder law plan. Powers of attorney can be subdivided into two categories: financial and health care. 

A properly drafted Power of Attorney allows an individual to designate an agent to make financial decisions in their stead. It is typically effective immediately upon execution, or it may be drafted to become effective only if the individual becomes incapacitated or incompetent. It offers protection and peace of mind if an emergency arises and the person becomes incompetent.

What is a Power of Attorney?

A Power of Attorney is a legal document for an individual (ward, or principal) that designates an agent. It provides broad powers to the agent to handle the ward’s property and financial decisions. Under Pennsylvania statutory law, POAs are presumed durable, meaning they do not become void upon the incapacity of the principal. Thus, you will often see a POA referred to as “durable power of attorney.”

POAs are usually broadly written to include a wide array of powers (authority) given to the Agent. The Agent in effect “stands in the shoes” of the Principal and can therefore do most of the same things that the Principal can do with respect to his or her own assets, including real or personal property.

Note: POAs differ from Guardianships in a few important ways. A POA is a voluntary document that allows a competent person to appoint an agent of their choice to make decisions on their behalf. A Guardianship is a court-imposed arrangement for incapacitated individuals. POAs are generally less restrictive, and Guardianships are often seen as a last resort.

Who Needs a Power of Attorney?

All adults should have a Power of Attorney in place. POAs offer protection and peace of mind if an anticipated or unexpected emergency arises. Even a simple POA can be critical in ensuring an individual’s financial needs are met in case of incapacitation. 

While the thought of granting someone broad powers over your assets, including the ability to sell property and open and close bank accounts, may be overwhelming, it is vital. If you were to fall ill without a valid POA in place, your family would need to petition the court to appoint a guardian, which can be a more extensive process. Also, when appointing a guardian, the judge may not choose the person whom you would have chosen to be your agent. In addition to this setback, the person appointed as your guardian may need to seek permission from the court to make decisions on your behalf that, under a valid POA, they would have been able to make at once.

Who Should Be an Agent?

Because of the extensive authority given to an agent, often the single most important decision that the principal or ward can make is whom to designate as his or her agent under the Power of Attorney. The designated agent should be someone whom the principal can trust implicitly, because if the wrong type of person is selected as agent, there is potential risk that the POA might be used improperly. 

An agent under a POA has certain obligations, one of which is to always put the needs of the principal ahead of his or her own. However, the agent’s authority under the POA is only as good as the person to whom they are given.

POAs can (and most often do) designate more than one person to act as an agent. If multiple persons are designated to act as agents, then the designated persons can be authorized to act contemporaneously (both at the same time) or in succession (one after the other). Establishing a line of succession for the agents is often advisable because of the possibility that a designated agent may become unable or unwilling to continue acting in that capacity.

If a POA authorizes agents to serve contemporaneously, the POA document can (and should) define the scope of the agents’ collective authority. Specifically, the POA can require each of the agents to act jointly, meaning that all agents must agree to any actions on behalf of the principal, or the POA can authorize any of the agents to act separately on behalf of the Principal. Authorizing separate action is usually more convenient for the agents and, for that reason, often more practical, particularly if one of the agents is not local. However, it works best if all of the agents are able to work well together and with a common vision for the welfare of the principal.

How a Pennsylvania Power of Attorney Lawyer Can Help

For a Power of Attorney to be properly executed, it must be dated and signed by the principal by signature or mark, or by another individual on behalf of and at the specific direction of the principal if the principal is unable to sign. A POA shall also be:

• Acknowledged before a notary public or other individual authorized by law to take acknowledgments. The notary public or other authorized individual cannot be the agent designated in the power of attorney.
• Witnessed by two individuals, each of whom is 18 years of age or older, and cannot be the individual who signed the power of attorney on behalf of the principal, the agent named in the power of attorney, or the notary public or individual authorized by law to take acknowledgments.

Knox Law’s attorneys can help provide guidance and legal authority for your Power of Attorney. We can determine how it best fits into your overall estate plan, how it may affect elder law planning, and how it satisfies your own personal legal goals. 

What Can a Power of Attorney Agent Do?

The agent selected to act on behalf of the principal in a Power of Attorney can have limited or broad powers, according to the principal’s wishes. An experienced attorney can guide the principal through the relevant decisions.

More broadly, an agent that has accepted an appointment has a:

• Duty to act in accordance with the principal’s reasonable expectations to the extent actually known by the agent and, otherwise, in the principal’s best interest.
• Duty to act in good faith. The Pennsylvania Estate and Fiduciary Code defines good faith as “honest in fact.”
• Duty to act within the scope of the authority granted. A principal may grant to an agent a narrowly tailored power of attorney or a very broad power of attorney.
• Duty of Loyalty. The agent must act loyally for the principal’s benefit. The agent must keep the agent’s funds separate from the principal’s funds unless: (1) the funds were not kept separate as of the date of the execution of the power of attorney; or (2) the principal commingles the funds after the date of the execution of the power of attorney and the agent is the principal’s spouse.
• Duty not to create a conflict of interest that impairs the agent’s ability to act impartially in the principal’s best interest.
• Duty to Act with Care, Competence, and Diligence. An agent that acts with care, competence, and diligence for the best interest of the principal shall not be liable solely because the agent also benefits from the act or has an individual or conflicting interest in relation to the property or affairs of the principal.
• Duty to keep a record of all receipts, disbursements, and transactions made on behalf of the principal.
• Duty to cooperate with a person who has authority to make health care decisions for the principal to carry out the principal’s reasonable expectations and, otherwise, act in the principal’s best interest.
• Duty to Attempt to Preserve the Principal’s Estate Plan. In determining whether preserving the plan is consistent with the principal’s best interest the following factors are relevant: (1) The value and nature of the principal’s property; (2) The principal’s foreseeable obligations and need for maintenance; (3) Minimization of taxes, including income, estate, inheritance, generation-skipping transfer and gift taxes; and (4) Eligibility for a benefit, program or assistance under a statute or regulation. An agent that acts in good faith shall not be liable to a beneficiary of the principal’s estate plan for failure to preserve the plan.

For more on an agent’s liability and POA litigation matters, see Power of Attorney Litigation.

Ensure Your Vision For Your Future is Set With Guidance From a Pennsylvania Power of Attorney Lawyer

Powers of Attorney are an essential part of a comprehensive estate plan. While they can be relatively simple, there are several options and factors to consider. An experienced attorney can review the issues and ensure a proper execution. Our team of Power of Attorney lawyers is ready to help with knowledge and compassion.

Please contact us today to learn how we can help and schedule a consultation.

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