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Pennsylvania’s New Power of Attorney Law

On July 2, 2014, Pennsylvania Gov. Tom Corbett signed into law Act 95 of 2014 which makes substantial changes to Pennsylvania’s power of attorney law.

A power of attorney (POA) is a document which gives you the authority to appoint an agent to make both financial and health care decisions on your behalf if you become disabled or incapacitated.  It is a very important legal document.

Under the new law, when you prepare your POA, it must be witnessed by two individuals and notarized.

Additionally, there are changes to the current notice and acknowledgment pages.  As the person making the POA, you sign the notice page. The notice page informs you of the broad powers you are giving to your agent.  The acknowledgment page must be signed by your agent before he or she uses the power of attorney. By signing, your agent agrees to act in your best interests, in good faith, and only within the scope of authority given the agent in the POA.

The new law gives your agent the authority to do the following on your behalf only if the POA expressly grants the agent such authority: the power to make a gift, to change a beneficiary designation, to create, amend, revoke or terminate an inter vivos trust, and to disclaim an interest in property.  It is important to discuss this with your attorney to ensure the required specific authority is included in your POA.  For example, an individual in a nursing home may protect a substantial portion of their estate by engaging in asset protection strategies using gifting.  However, if you are incapacitated and your POA does not include the specific gift provision, your agent may not be able to protect your assets by gifting them to your family, and your assets by will have to be spent to pay the nursing home.

The majority of the remaining changes to the power of attorney law pertain to liability and immunity of third parties who accept and rely on the validity of the POA.  The third parties most frequently involved will be your bank and other financial institutions.  Generally, the third party should either accept a properly prepared and executed POA or request one of the following: 1) an affidavit from the agent regarding proof of the continuance of the POA, or 2) a certification, translation, or opinion of counsel relating to the acceptance of and reliance on your POA.

The effective date of the new law is the date it was signed into law for those portions of the law pertaining to liability and immunity of third parties.  All other provisions of the law become effective on January 1, 2015.

If you already have a POA, its provisions are still valid after January 1, 2015. Only POAs made after that date are subject to the new law.  However, to ensure your current POA meets your needs, it is recommended that you review it with your attorney.

Take the time now to ensure that you have a properly prepared power of attorney in place.  It may be too late if you become disabled or incapacitated.  At that point, a guardian will have to be appointed for you.  This will require court action and can be quite costly.