When discussing estate planning, most people think of drafting a will or trust. However, part of estate planning involves planning while you are still alive. For an estate plan to be complete, you should execute a power of attorney. A power of attorney (POA) designates a person who will make important decisions on your behalf if you are unable to do so.
In this blog, our PA estate planning lawyers discuss the importance of executing a power of attorney and the importance of working with experienced counsel.
Power of Attorney: What You Need to Know
A power of attorney gives someone the legal authority to act on another person’s behalf regarding certain matters. This person that you have appointed is known as your agent. The person who the power of attorney benefits is known as the principal.
While a financial POA allows your agent to act on your behalf regarding financial decisions and property transactions, a healthcare POA allows your agent to make medical decisions in the event of your incapacitation.
What Are the Requirements for Executing a POA?
Effective as of January 1, 2015, Title 20 of the Pennsylvania Consolidated Statutes § 5601(b) states that the principal must sign a financial POA in the presence of two witnesses and must be notarized. The witnesses must be at least 18 years of age, mentally competent, and both neutral parties. The notary public cannot be one of the two agents.
If the principal is unable to provide a signature, then the individual may place a mark, usually notated by an “X,” or direct another person to sign on his or her behalf.
Although the requirements for a health care POA are no less strict, they are largely the same. In neither estate planning document can a healthcare provider or agent sign on behalf of the principal if providing medical care to the principal.
What is a Durable Power of Attorney?
As the name suggests, a Durable POA remains valid if you become disabled or incapacitated. Even if you do not specify in the document, it is assumed that a POA is durable.
Although a POA will take effect immediately, you can specify a certain time at which it should become effective. Known as a springing power of attorney, you can stipulate when your agent will have the authority to act on your behalf. This springing event is typically upon you being declared incompetent or incapacitated. However, if you do not include a ‘springing’ clause, then it is presumed that your POA will take effect upon signing.
Powers Granted in a Financial POA
A power of attorney can give your agent limited powers or the power to at their discretion. For example, a limited power of attorney may give your agent the power to sell your house. In contrast, a general power of attorney grants your agent the power to sell or dispose of your property without prior approval.
Powers Granted in a Health Care POA
Under 20 Pa.C.S. §5453, a healthcare power of attorney declares that a healthcare agent can make medical decisions on behalf of the principal. It may include the following additional provisions (but is not required to):
- Instructions to initiate or terminate life-sustaining treatment
- Indicate whether the principal wants tube feeding, artificial nutrition, or hydration
- Disqualify a person from acting as a health care representative
- Nominate a guardian for the principal as provided under the law
- Request that the health care agent consult with a relative, priest/clergy, or treating physician if unsure about how to proceed with treatment
Why You Should Hire a PA Estate Planning Attorney
Estate planning laws are constantly changing, requiring that you have a thorough understanding of the law. Each person’s finances and estate are different, meaning that the same boilerplate estate plan will not work for everybody.
A power of attorney is only one small piece of a complete estate plan. Estate planning is complex, involving distributing assets to heirs, inheritance taxes, and burial arrangements. DIY estate planning is never a good idea since you may leave out important language, causing your wishes not to be carried out in the way you intended.
A PA Estate Planning Attorney Dedicated to Carrying Out Your Wishes
End-of-life choices can be difficult to make, but it is crucial that your desires are honored. A power of attorney gives you peace of mind, ensuring that your finances and medical wishes are handled by someone you trust. Whether you are interested in having your estate plan revised or in drafting a new plan altogether, our PA estate planning attorneys are here to assist you. To get started, contact our legal team online.