A Power of Attorney is a document that allows an individual, the Principal, to appoint someone, an agent, to manage their financial and legal affairs. An agent may be granted very far reaching powers, including the ability to make gifts, transfer property, and create trusts in the individual's name. A Pennsylvania Power of Attorney agreement may also include medical decisions, such as the ability authorize medical procedures and surgery, and admittance into nursing and long-term care facilities. Each power that the Agent will be allowed to exercise should be specifically listed in the document. A successor Agent should also be appointed in case the first Agent is unwilling or unable to act.
To execute a Power of Attorney in Pennsylvania, the individual authorizing the power of attorney needs to have legal capacity (defined generally as understanding what is being authorized), or it may be executed by another person, in which case there must be two witnesses. The power of attorney document does not need to be notarized if the individual has the required capacity, but it is generally good practice to have it notarized anyway.
There are two types of power of attorney: springing Power of Attorney and general durable Power of Attorney. Springing Power of Attorney, which is the more disfavored type, only becomes effective when and if the Principal loses capacity to make their own decisions. Springing Power of Attorney is disfavored because it can be difficult to determine at what point the Principal's capacity is lost.
General durable Power of Attorney, alternatively, becomes effective upon the execution of the agreement, and remains in effect after the Principal suffers from incapacity. This type of Power of Attorney is preferred because it removes the issue of determining incapacity. If choosing durable Power of Attorney, the Power of Attorney agreement should explicitly state that it is "durable."
Power of Attorney remains in effect unless revoked by the Principal giving notice to the Agent of their desire to terminate the agreement. It may also terminate upon the death of the Principal, or in the case of a non-durable Power of Attorney, upon the determination of the Principal's incapacity.
If you are interested in creating a power of attorney in Pennsylvania, contact our Pittsburgh Wills & Estates lawyers at Lisa Marie Vari & Associates. Our team will be happy to discuss your estate planning with you and help you plan for your future.