Granting a Financial Power Of Attorney (“POA”) gives an individual (the “Agent”) the ability to manage your assets (the “Principal”) and make decisions on your behalf during your lifetime. As soon as the POA documents are signed, they are active immediately, which makes choosing someone you trust essential. In Pennsylvania, a new POA law was passed in 2014 that changed may aspects of the old POA laws. Some of the major changes are explained below by our estate lawyers in Philadelphia at Astor Weiss Kaplan & Mandel, LLP.
New “NOTICE” page
The first page of each POA has a “Notice” provision. The new law has new notice language that is modified to warn the Principal that the document may grant the Agent the power to give away the Principal’s property or change how the property is distributed at the Principal’s death.
A Principal will need to sign a POA that is executed in Pennsylvania in front of a notary and two adult witnesses that are 18 years or older. A witness cannot be the one of the Agents or the notary. POAs executed before January 1, 2015 remain exempt from this new requirement.
Liability of Agents
Revised to state that the Agent must act in accordance with the Principal’s reasonable expectations to the extent the agent actually knows them and in “good faith” and only within the scope of authority granted by the Principal. If you are a Agent and find yourself facing accusations, contact our estate lawyers in Philadelphia for guidance on how to exercise your rights as an Agent under the new law.
Now certain powers need to be specifically listed if you want your Agent to have authority. These are called the “Hot Powers” and are listed out below:
- Create, amend, revoke or terminate a living trust
- Make unlimited gifts (i.e., greater than $14,000 to an individual in any given year)
- Create or change rights of survivorship.
- Create or change a beneficiary designation.
- Delegate authority granted under the POA.
- Waive the Principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan.
- Exercise fiduciary powers that the Principal has authority to delegate.
- Disclaim property.
At Astor Weiss Kaplan & Mandel,LLP our estate lawyers in Philadelphia stress the importance of becoming familiar with the new POA law and reviewing all of your POA documents to ensure that they are in good standing and provide the desired amount of power that you intend for your Agent. Failure to do so can prevent the Agent from being able to act. For further questions, contact us at 215-790-0100.