Obtain Power of Attorney in Pennsylvania

The term "power of attorney" is somewhat misleading, since it can make people think that an attorney must be involved in the arrangement when that is not, in fact, the case. A power of attorney can be created by any competent adult in Pennsylvania who wishes to give another adult – law degree not required – power to act for them in some matter.

On the other hand, use of the term "power" is appropriate, since anyone creating a power of attorney gives someone else the power and authority to act on their behalf. It's important to understand what a Pennsylvania power of attorney involves before creating one.

A power of attorney (POA) is a legal document that one person creates to give a specified individual the power to act on their behalf in one or more matters. The person making the power of attorney is referred to as the principal, and the person named to act for them is called the agent.

In Pennsylvania, as in most states, the principal controls the POA document; they decide who will be named agent and the scope of the power they are allocating.

There is no set form for a Pennsylvania POA, since the needs and wants of each principal are different. The person making the power of attorney gets to decide the scope of the authority they are giving to their agent.

There are no limits on how narrow the power can be. A principal can give an agent an extremely limited grant of authority for a very narrow purpose, like the right to sell their bicycle for them.

On the other hand, Pennsylvania also recognizes extremely broad grants of authority. These broad POAs are almost always in the realm of finances or health care. However, some authority can be granted only if detailed in the language of the POA.

While a principal may assign an agent almost any degree of authority they wish under a POA, some must be specified in detail in order to be effective. That is, the state statutes limit general grants of authority.

A POA agent is authorized to do some things with the principal's property only if the language of the POA expressly grants the agent that authority. For example:

• Create, amend, revoke or terminate an inter vivos trust.
• Make a gift of the principal's property.
• Create or change rights of survivorship.
• Create or change a beneficiary designation.
• Delegate POA authority.
• Waive the principal's right to be a beneficiary of a joint and survivor annuity.
• Exercise fiduciary powers that the principal has authority to delegate.
• Disclaim property.
• Access the electronic communications and digital assets of the principal.

It's easy to get the idea that POAs are only for the wealthy, but this is not at all the case. Anyone could need a power of attorney, or at least find one to be helpful. This document that gives one individual the legal power to act for another can be extremely helpful in the short term by giving a realtor the power to sign off on the sale of an out-of-state property owned by the principal, for example.

And POAs are also a critical part of an estate plan. What role might a Pennsylvania POA play in a resident's estate plan? Many people set up a POA that will be in effect if and when they are no longer able to make decisions for themselves.

A durable power of attorney in Pennsylvania does not expire when a person becomes incompetent, so a resident can name a trusted person to manage their financial affairs or health care in case this occurs.

There are several types of powers of attorney in Pennsylvania. The four primary types in this state are:

• Limited.
• General.
• Durable.
• Springing.

A limited power of attorney, sometimes called a "regular" power of attorney, is one with a fairly narrow scope, like selling a bicycle or giving someone authority to sign a check during the one day that the principal is out of town. The principal gets to define the scope of the agency.

A general power of attorney has a broader scope. It assigns the designated agent all of the powers and rights that the principal has. A principal could use a general power of attorney to allow an agent to run all of the principal's financial and business obligations.

Note that both of these types of Pennsylvania POAs are valid only for a set period, which can be a period of time stated in the document. For example, a principal might give an agent three months to sell their bicycle. If a spouse is named as a POA agent in Pennsylvania, their agency terminates when divorce papers are filed.

At one time, the state law provided that if a principal does not include a termination point in the POA itself, a limited or general Pennsylvania POAs would last until the principal:

• Terminates the agreement.
• Dies.
  
• Becomes incompetent.

However, recent amendments to the Pennsylvania POA statutes create a presumption in favor of durable powers of attorney. That means that unless the principal includes a termination point, terminates the agreement or dies, these types of POAs remain in effect whether or not the principal becomes incompetent.

A durable power of attorney is one that is in effect when a principal is competent and remains in effect after the principal becomes incapacitated. This type of POA gives the principal security in knowing that, should they become incompetent, they will be represented by someone they know and trust.

The durable power of attorney can be a narrow or a general one, and it remains in effect until the principal's death, unless they revoke or cancel it while they are still competent.

Under recent amendments to the Pennsylvania law, all powers of attorney in the state are deemed durable, so they continue to be effective after the principal becomes incompetent unless they specifically state otherwise. Section 5601.1 states:

"Unless specifically provided otherwise in the power of attorney, all powers of attorney shall be durable as provided in Section 5604 (durable powers of attorney)."

In fact, the purpose of a Pennsylvania Durable Power of Attorney for Health Care is to give the agent the authority to make healthcare decisions on behalf of the principal if they become incapacitated. This Durable Power of Attorney for Health Care is also called a Pennsylvania Advance Directive for Health Care. It is considered an important part of estate planning.

The fourth type of Pennsylvania power of attorney is termed a springing power of attorney. This POA "springs" into existence, or becomes effective, only when a specified event occurs. For example, it is used by military personnel who expect to be deployed overseas; the springing power of attorney is written to become effective if and when the overseas deployment takes place.

Another common use of the springing power of attorney is when a principal wants a POA to becomes effective only if they become incapacitated. In this type of POA, the principal manages their own affairs until the moment they become incapacitated.

Many POAs in Pennsylvania are springing health care POAs, used in estate plans as a safeguard should the principal become incompetent, unable to manage their affairs or determine appropriate medical care.

Under Pennsylvania law, a person must be over the age of 18 years to make a POA. The power of attorney must be signed and dated by the principal. However, if the principal cannot sign their name, they can sign with a mark or direct someone else to sign the POA.

All Pennsylvania POAs, other than health care POAs, must be signed before a notary or other individual authorized by law to take acknowledgments. They must also be witnessed by two adults who are not otherwise involved in the POA as the agent or the notary. That is, an agent cannot sign as a witness, nor can a person who is asked to sign in the principal's place.

Pennsylvania recognizes the importance of the authority given to the agent under a POA by requiring that every POA document contain language putting the principal on notice. The notice must be written all in capital letters and must include the following language:

• The purpose of this power of attorney is to give the person you designate (your "agent") broad powers to handle your property, which may include powers to sell or otherwise dispose of any real or personal property without advance notice to you or approval by you.

• This power of attorney does not impose a duty on your agent to exercise granted powers, but, when powers are exercised, your agent must use due care to act for your benefit and in accordance with this power of attorney.

• Your agent may exercise the powers given here throughout your lifetime, even after you become incapacitated, unless you expressly limit the duration of these powers or you revoke these powers or a court acting on your behalf terminates your agent's authority.

• Your agent must act in accordance with your reasonable expectations to the extent actually known by your agent and, otherwise, in your best interest, act in good faith and act only within the scope of authority granted by you in the power of attorney.

• The law permits you, if you choose, to grant broad authority to an agent under power of attorney, including the ability to give away all of your property while you are alive or to substantially change how your property is distributed at your death. Before signing this document, you should seek the advice of an attorney at law to make sure you understand it.

• A court can take away the powers of your agent if it finds your agent is not acting properly.

• The powers and duties of an agent under a power of attorney are explained more fully in 20 Pa.C.S. Ch. 56.

• If there is anything about this form that you do not understand, you should ask a lawyer of your own choosing to explain it to you.

The agent is required to acknowledge their duties. They must execute an acknowledgement stating that they have read the POA and understand that they must act in accordance with the principal's reasonable expectations and in the principal's best interest, act in good faith and only within the scope of authority granted in the power of attorney.

Both the notice and the acknowledgement form must be attached to the power of attorney, otherwise it is not legal in Pennsylvania.