Pennsylvania’s power of attorney requirements changed at the beginning of the year. In truth, some changed in 2014, but everything included in the bill passed last year is now in full force. And while change can be hard in this area of the law, the good news is that these changes offer greater protection to both the principal and the agent.
In our March 9 post, we talked about the new requirement that two witnesses sign the power of attorney and that the document be notarized. Further, neither the agent nor the principal’s spouse can be a witness. The old law also required that an agent sign an acknowledgement before taking any action as the attorney-in-fact.
The contents of the acknowledgement are laid out by statute, the same way the contents of the notice discussed in our last post are. As it happens, the changes to the acknowledgement reflect the changes made to the notice. The agent pledges to act “in accordance with the principal’s reasonable expectations to the extent actually known by [him or her]” and in the best interest of the principal. The agent pledges not to exceed the authority granted by the power of attorney and promises to act in good faith in all dealings as agent.
The principal and his or her counsel may alter the acknowledgement, but not by much. The law allows changes, yes, but the acknowledgement must closely follow the statutory language.
Certainly the best term used in the new law is “hot powers.” Hot powers must be included in the power of attorney for the agent to have any authority in that area. Again: If the principal wants the agent to have one, some or all of these “hot powers,” the authority must be included in the power of attorney document.
Hot powers generally cover any acts that would alter the value or makeup of the estate. The creation, amendment, revocation or termination of a living trust, for example, would not only affect the estate but it would compromise the wishes of the principal when the principal had capacity.
We’ll cover the last of the changes in our next post.
Source: Legal Intelligencer, “Key Provisions of the New Power of Attorney Law: Act 95,” Amy Neifeld Shkedy and Rebecca Rosenberger Smolen, March 6, 2015