Here are some Highlights
On July 2, 2014, Act 95 significantly changed Pennsylvania’s law regarding powers of attorney. Some changes were effective immediately; others began January 1, 2015. The changes only affect financial powers of attorney, not those limited to health care choices. Our purpose here is to give you an overview and highlight some of the significant changes.
Keep in mind that a power of attorney document is executed by a person, the “principal”, to grant certain powers to another, their “agent”, to act on his or her behalf.
The Act set forth extensive provisions describing and outlining the agent’s duties. The agent is to act (i) in good faith, (ii) only within the authority the principal has given, and (iii) generally in accordance with the principal’s reasonable expectations, to the extent actually known by the agent. If the principal’s expectations are not known, then in the principal’s best interest. The Act also details certain powers that must be clearly given to an agent, such as the power to deal with trusts and gifting.
Most of the following provisions took effect on January 1, 2015, applying only to powers of attorney executed after that date. A power of attorney must now be notarized and the signature witnessed by two adults. A witness cannot be the agent or the notary.
Additionally, the Act has provided protections for financial institutions that would rely on a power of attorney. The Act sets forth that if a financial institution accepts a power of attorney in good faith without actual knowledge that (i) the signatures are not genuine and valid, (ii) the power is no longer in effect, or (iii) the agent is acting outside the scope of his or her authority, the financial institution may do so without liability.
This is a brief outline of some significant changes to financial powers of attorney under Act 95 of 2014. If you would like more information, don’t hesitate to contact our office at 570-743-2333 or 888-505-6115 to help with your power of attorney, estate planning or elder law needs.