Pennsylvania Durable Power of Attorney Laws

There are many types of powers of attorney (POA). In general, a POA is a legal document that authorizes another person to act on behalf of the principal. This article is about durable powers of attorney in the context of estate planning.

A durable power of attorney is a proactive tool you can use to appoint someone to manage your financial matters if you become incapacitated. It is an essential part of a comprehensive estate plan. Without a durable POA, your loved ones may need to petition the court to appoint a guardian to manage your affairs. The process can be time-consuming, costly, and lead to family conflict.

By creating a durable POA, you designate who will manage your financial affairs if you are unable to do so yourself. A valid, durable POA can help ensure that authority passes smoothly to the person you’ve chosen to act on your behalf.

This article explains what a durable POA is, the requirements for a valid durable POA under Pennsylvania law, and the agent’s role. If you’d like to make a durable power of attorney part of your estate plan, options for creating one are included below. If you have further questions, consider meeting with a Pennsylvania estate planning attorney for legal guidance.

What Is a Durable Financial Power of Attorney?

For your durable financial power of attorney, you appoint another trusted person to serve as your agent (sometimes called “attorney-in-fact”) if you become incapacitated. This agent can manage your financial and legal matters during your incapacity.

A Pennsylvania estate plan usually includes a will or a trust to direct how your assets are distributed after your death. Incapacity planning is about how you want your affairs managed if you are unable to do so yourself.

In Pennsylvania, your healthcare decisions are usually managed under an advance directive. Your advance directive may include a living will to express your wishes regarding your medical care, along with a healthcare power of attorney to designate someone to make decisions. Together with a durable financial power of attorney, these legal documents ensure your wishes are known and carried out if you become incapacitated.

How To Make a Valid Durable POA in Pennsylvania

Pennsylvania law imposes specific statutory requirements on the principal, the agent, and the document itself. Failing to comply with these requirements can create questions about the validity or enforceability of the power of attorney.

Principal Requirements

The principal must have sufficient legal capacity to understand the nature and effect of the POA at the time it is signed. The principal may sign the power of attorney by signature or by mark. If the principal is physically unable to sign, they may direct another person to sign on the principal’s behalf. This person may not also serve as a witness. When a principal signs by mark or directs another individual to sign on the principal’s behalf, the document must also be witnessed by two adults who are at least 18 years old.

Agent Requirements

Choosing your agent is an important decision. They will have significant authority over your financial and legal affairs. Every agent must sign a statutory Agent’s Acknowledgment before exercising authority under the power of attorney, discussed further below.

Pennsylvania law does not prohibit co-agents, but appointing more than one agent may cause unintended friction. You may also appoint successor agents. This can ensure your durable POA endures, even if your initial agent’s authority terminates. Without an agent, the POA terminates.

Document Requirements

A Pennsylvania durable power of attorney document must meet several statutory requirements. The durable POA must be:

• In writing
• Dated
• Signed or marked by the principal or, if the principal cannot sign, signed by another individual at the principal’s direction (that person cannot also be a witness)
• Witnessed by two adults
• Acknowledged before a notary public

In addition, two statutory elements must be included. The durable POA must have a statute-specific notice to the principal, with the heading “NOTICE” in all capital letters. They must sign this notice. Without it, the agent has the burden of proof that the exercise of authority was proper if the agent’s authority is challenged.

Pennsylvania law also requires every agent to sign a separate statutory Agent’s Acknowledgment. Under this, they agree to act in accordance with fiduciary duties and the principal’s expectations before exercising authority under the power of attorney.

Your Agent’s Duties, Powers, and Limitations

Any competent adult can serve as your agent in Pennsylvania. You can choose a family member, a friend, a professional, or a qualified corporation. In determining who should serve as your agent, it’s important to understand your agent’s duties, powers, and limitations.

When Is the Agent’s Authority Effective?

The agent’s authority becomes effective in accordance with the document’s terms. A Pennsylvania power of attorney can be drafted to be effective under either of the following:

• Immediately upon execution
• Upon a specified future event, such as incapacity (a “springing” power of attorney)

Either approach can be effective for incapacity planning. The important thing is that the agent’s authority must survive the principal’s incapacity.

Some states require specific “durability language” for a power of attorney to remain effective after the principal’s incapacity. In Pennsylvania, durability is presumed unless the POA specifically states otherwise.

Agent’s Duties

Under Pennsylvania law, an agent has several duties. Some of the agent’s key duties are to act:

• In accordance with the principal’s reasonable expectations to the extent the agent actually knows them and, otherwise, in the principal’s best interest
• In good faith
• Only within the scope of authority granted in the POA

These particular duties are part of the Agent’s Acknowledgment mentioned above.

Agent’s Powers

The powers granted to an agent depend on the language of the document. Common grants of power include authority over real estate transactions, financial transactions, retirement plan transactions, securities transactions, safe deposit boxes, tax matters, business operations, and government benefits.

Pennsylvania law requires certain significant powers to be specifically granted in the document. These include the authority to:

• Create, amend, revoke, or terminate certain trusts
• Make gifts
• Create or change rights of survivorship
• Create or change beneficiary designations
• Delegate authority to another person

The agent is bound by fiduciary law to do their best to meet the principal’s wishes.

Agent’s Limitations

While an agent under a Pennsylvania durable financial power of attorney has broad authority, it’s not unlimited. The agent’s authority is defined by the POA and limited by statute, fiduciary duties, and the nature of certain personal rights that cannot be delegated.

Terminating a Durable Power of Attorney

Your agent’s authority can terminate by operation at your death, under the terms of the durable POA, or if the agent is unable or unwilling to serve and no successor agent is available. In addition, if your spouse is your agent, the agent’s authority often terminates if a divorce or annulment action is filed, unless the POA terms provide otherwise.

You may revoke your POA at any time if you have legal capacity. Revocation typically is accomplished by executing a written revocation, notifying the agent, and notifying any financial institutions or third parties that may have relied on the document.

Do You Need an Attorney?

You do not have to use an attorney to create your durable power of attorney. The state of Pennsylvania does not mandate a statutory durable POA form, but online do-it-yourself templates are available that meet state-specific requirements.

Connect With a Pennsylvania Estate Planning Attorney

A power of attorney can grant significant authority over your finances and property. Some people prefer to work with an estate planning attorney to prepare a customized document that reflects their needs and goals. If you want the peace of mind that comes from legal advice tailored to your situation, find a Pennsylvania estate planning attorney near you to get started on your durable power of attorney.