In this week's blog entry, our colleague and guest blogger, Kathryn “Cindy” Macmillan, Esq., The “Wills on Wheels” Lawyer explains new Power Of Attorney rules in Pennsylvania.
As of January 1, 2015, recent changes were made to Pennsylvania’s Power of Attorney (also known as Durable Power of Attorney) which one should be aware of. A power of attorney is a document which gives another person, your “Agent,” the power to make financial decisions and property transactions on your behalf, the “Principal.” Without going through a lot of legal jargon, I’d like to explain some of the revisions to the power of attorney, also known as House Bill 1429, Act 95 of 2014. If you have a power of attorney that was signed before January 1, 2015, don’t worry, it’s still in effect. The new law applies only to a power of attorney signed after this date.
Let’s start with the first page of the document called “Notice to Person Signing the Power of Attorney.” The new notice has added language which requires your agent, to “act in accordance with the reasonable expectations actually known by your agent, and otherwise, in your best interest, act in good faith and act only within the scope of authority granted to you in the power of attorney.” The notice also states that you may choose to grant your agent the power to give away your property or change how it is to be distributed at death. The reason for the initial notice is to make sure you completely understand the control you are giving the agent. This first page notice must be signed and dated by you, the principal. This is a powerful document so it is extremely important that you trust your agent and understand the duties you have entrusted upon him or her.
Another change involves the agent’s acknowledgment (agent’s duties), the last page of the power of attorney behind the principal’s notarized signature. This document must be signed and dated by the agent (no notary required) before the power of attorney becomes effective. The new law requires that there are three duties that the agent must follow:
- act in accordance with the principal’s reasonable expectations to the extent actually known by the agent, and otherwise in the principal’s best interests,
- act in good faith,
- act only within the scope of authority granted in the power of attorney.
There are other modifiable duties which can be included in the agent’s acknowledgment. Some of these duties include, keeping funds separate, keeping a record of all receipts, disbursements and transactions made on behalf of the principal, and preserving the principal’s estate plan to the extent known by the agent, only if the plan is consistent with the principal’s best interest. It is important to review all of the modifiable duties with your attorney to make sure the document is tailored to your particular needs.
A few extra facts to be aware of:
- the law now requires that the principal’s signature must have two witnesses over the age of 18, must be notarized and the notary cannot be a witness,
- the medical power of attorney is not affected in any way by the changes made to the durable power of attorney,
- the power of attorney is automatically revoked upon the death of the principal.
I have just touched upon a few of the changes to the power of attorney. If you have any questions, please contact me, Kathryn “Cindy” Macmillan, Esq., The “Wills on Wheels” Lawyer at 610-416-6933. I “will” come to you for your will, durable power of attorney, medical power of attorney and living will.
Cindy's website is: www.awill4u.com, and her e-mail address is: Kmacmillan8@comcast.net., serving Southeastern Pennsylvania and surrounding areas. If you need me to bring witnesses, I can do that to! “Witnesses on Wheels.”