What is a Durable Power of Attorney and How Does it Work?

As we age, it’s easy to overlook the fact that we won’t always be able to manage our own affairs. By granting decision-making authority to someone you trust now, you can help prevent legal complications later when that assistance becomes necessary. The authority takes effect once a power of attorney is signed, provided that specific legal requirements are met. To better understand your rights, our estate planning attorneys discuss everything you need to know concerning durable powers of attorney in Harrisburg and across the Keystone State.

What is a Power of Attorney?

A power of attorney (POA) is a legal document that allows you to appoint someone to manage your medical and financial affairs, known as a healthcare power of attorney and a financial power of attorney, respectively. A healthcare power of attorney will specify a fiduciary to make your medical decisions if you become incapacitated. It serves to clarify any confusion regarding your treatment, thereby protecting your treating provider and your healthcare agent (if applicable) from liability.

A financial power of attorney can give your agent (also known as your “attorney-in-fact”) wide-ranging or limited authority regarding financial matters. A financial POA that you would sign as part of your estate plan typically grants broad jurisdiction. This may include managing bank accounts, signing financial documents, and paying bills.

If your agent does have broad decision-making powers, then the language within the financial POA must reflect that. Alternatively, you can sign a limited power of attorney, which would permit your agent to act on your behalf in specific situations. The most common conditions include signing for a loan or selling your home.

Requirements for a Valid Power of Attorney in PA

A valid POA must meet the following requirements in Pennsylvania:

• The POA must be in writing
• It must be signed and dated
• You must sign the POA in the presence of two witnesses (neither witness can be named as your agent) or a notary public
• Select a competent person over the age of 18 to act as your agent
• You must be mentally competent when signing the POA
• Your agent must sign an Acknowledgment stating that they understand their fiduciary responsibilities. The Acknowledgment must be affixed to the POA

What Does It Mean When a Power of Attorney is “Durable”?

Unlike a general power of attorney, a durable power of attorney remains in effect even after incapacity. However, since 1992, all powers of attorney executed in Pennsylvania are automatically durable. Additionally, Pennsylvania law allows the principal (you) to specify when the document will take effect. This is often referred to as a “springing clause,” as the POA will take effect upon the occurrence of a specific event. Most often, this is in the event of the principal’s incapacity or disability. If you do not specify a particular event, then the document will take effect immediately. The POA will remain in effect unless you specify a termination date.

Avoiding Court Involvement

By executing a power of attorney, you prevent the court from getting involved in your affairs. Without a POA, the court may need to assign a guardian (for healthcare decisions) or conservator (to handle your finances) if you become unable to manage your own affairs. You will have to be deemed incompetent by the court before a guardian or conservator can be appointed. Unfortunately, you will have no control over your finances or medical decisions since you did not specify your wishes prior. The court process is relatively expensive, with attorney fees ranging from $2,000 to $5,000 for uncontested cases.

Do I Need a Lawyer to Execute a Power of Attorney?

An estate planning attorney does much more than draft documents. They can advise you on which family members to name for specific roles, based on the duties associated with each. At Mette Law, we help you create an estate plan that fully meets your needs. Our legal team can help you identify the qualities to look for in an agent and outline their specific duties, ensuring your power of attorney is tailored to your needs. Unless your life circumstances change, a POA will serve you for many years to come.

Speak with a Harrisburg Estate Planning Lawyer at Your Earliest Opportunity

Deciding who to appoint to manage your finances and healthcare decisions can be a daunting task. Nobody wants to think about the worst-case scenario, but by covering your bases, you prevent the court from getting involved in your personal affairs. At Mette Law, our Harrisburg estate planning lawyers take pride in assisting clients throughout their estate planning journey. If you are interested in scheduling a confidential meeting with a member of our legal team, contact us online or by phone at (717) 232-5000.