FROM MIKE’S DESK
What is a Power of Attorney?
Let’s start with the basics by defining a Power of Attorney (POA) and the key parties involved. A POA is a notarized document that allows you to appoint a person (known as an Agent) to manage your affairs if you become unable to do so. You represent the Principal, meaning that you are the person who is granting “power”, or designating another person (the Agent), authority to act on your behalf. Your Agent shall act in good faith and in accordance with your reasonable expectations.
For instance, if you sign a POA for your daughter, Joan, to help you write checks to pay your medical bills, you are the Principal while Joan is the Agent.
In a typical POA, you provide your Agent powers to assist you with financial transactions (writing checks), entering into contracts, or selling real estate. Pennsylvania law provides a long list of powers that can be delegated to an Agent.
What Are Different Terms for a POA?
You may hear people refer to POAs has General, Financial, or Durable. In most cases, people are referring to the same document. The reasoning behind some of these references may be as follows:
- General usually refers to the Principal granting the Agent all types of powers in the event the Principal does not act.
- Financial is typically used when the main focus of the Agent power is to assist the Principal with financial actions.
- Durable is a reference to the power remaining unaffected by the Principal’s subsequent disability. Pennsylvania law now provides that all powers are durable. 20 Pa.C.S.A. § 5601.1.
Are There Recent Changes to POA Law?
Over the last 15 years, there have been several significant changes to POA law in Pennsylvania. The Legislature made these changes in response to abuses involving Agents, and the updates became effective in January 2015. Despite these changes, older POAs remain valid, assuming they were properly prepared and executed. However, it is wise to re-examine any older POA documents. This is due to the fact that individuals and businesses that may rely upon POAs, such as banks, might be unfamiliar with old versions and only accept newer document formats.
What If a POA Is Not in Place?
Many times, when no advance planning has taken place, guardianship will be necessary if a person becomes incapacitated. This highlights the fact that, if you do not have certain documents in place, such as a POA, guardianship procedures may be necessary to protect your best interests against your own incapacity. Guardianship procedures can be expensive and cumbersome, and the outcome is uncertain. Therefore, the best thing you can do for yourself is to prepare essential estate planning documents, such as a POA, to determine whether your wishes are carried out.
Need Help Getting Started on Your Estate Planning?
Preparing a POA is a common estate planning tool to assist you in the event of possible future incapacity, and simply to assist you with certain transactions. In most cases, it is a better alternative than placing assets in joint names.
Estate planning can seem daunting, but with an advocate at your side, it doesn’t have to be. With decades of experience in estate planning law. I am available to help you prepare key documents. Please contact me to set up time to discuss your plans. I look forward to hearing from you.
Michael Frisbie
Frisbie Legal Solutions
169 N. Broad Street
Doylestown, PA 18901
267-899-1776
267-899-1775 (FAX)
michael@frisbielegalsolutions.com
Frisbie Legal Solutions, PLLC, is a registered professional limited liability company in Pennsylvania. The information on this website is designed for general informational purposes only. Frisbie Legal Solutions provides legal services and advice to clients only after an attorney-client relationship has been formed through a written agreement. The information presented should not be construed to be formal legal advice nor the formation of an attorney-client relationship. Any communications sent through this website are not privileged and confidential.