Your carefully crafted will outlines who receives your assets after you're gone. But what happens if you become unable to manage your affairs while you’re still alive? At Ruggiero Law Offices, our Paoli PA estate planning lawyers help families address this gap and prepare for all of life's possibilities. Power of attorney documents protect you during your lifetime when you cannot speak or act for yourself.
How Power of Attorney Works in Pennsylvania
A power of attorney (POA) is a legal document granting someone authority to make decisions or act on your behalf.
Under Pennsylvania statute 20 Pa.C.S. § 5601, you (as the "principal") can appoint someone (your "agent") to handle various matters when you cannot. Pennsylvania law allows you to customize these documents to fit your needs and concerns. This might include paying bills, selling property, making healthcare choices, or managing investments.
Without this documentation, your family might need court intervention through guardianship proceedings—a process that can be costly, time-consuming, and stressful during an already difficult time.
Types of Powers of Attorney You Should Consider
Pennsylvania recognizes several types of power of attorney documents, each serving a different purpose in your Paoli estate plan.
Financial Power of Attorney
This document covers the management of your finances and property. Your appointed agent can handle banking matters, like depositing checks and paying bills. If you're hospitalized for several months, your agent could ensure your mortgage continues to be paid. Under a financial POA, your agent can also buy or sell property, as might be the case if you need the funds to pay for long-term care.
Healthcare Power of Attorney
A healthcare power of attorney document addresses medical decisions when you cannot communicate your wishes. It covers treatment decisions, like consenting to or refusing medical procedures based on your known preferences. If needed, your agent can also transition you from in-home care to an assisted living facility.
Other Types of Power of Attorney
Along with financial and healthcare POAs, Pennsylvania law also allows for a limited power of attorney, which restricts your agent’s authority to specific tasks or timelines. There is also a springing power of attorney, which only comes into effect when a specific event occurs, like if you're declared incapacitated.
Choosing the Right Agent for Your Power of Attorney
Selecting someone to make decisions on your behalf is one of the most important aspects of creating your power of attorney documents. Essential qualities you may look for may include:
- Trustworthiness. Your agent will have significant control over your affairs. Choose someone with unquestionable integrity who will always act in your best interest.
- Financial responsibility. For financial POAs, select someone who manages their own finances well. A person who struggles with debt might not make sound decisions about your assets.
- Good judgment. Your agent may face difficult decisions, particularly regarding healthcare. Choose someone who can weigh options carefully and make thoughtful choices under pressure.
- Knowledge of your wishes. Select someone familiar with your values and preferences. For healthcare decisions, this person should understand your religious beliefs, quality-of-life priorities, and treatment preferences.
- Availability. Consider the person's proximity and availability. Someone who lives nearby and has flexibility in their schedule will likely be more effective than someone who lives far away or has overwhelming commitments.
Don't automatically select your oldest child or closest relative without considering their qualifications. Family harmony is important, but your agent's abilities should be the priority. Always name at least one alternate agent in your documents in case your first choice is unavailable when they’re needed.
The Effective Period for Your Power of Attorney
Unless specified otherwise, a financial power of attorney becomes effective immediately upon signing. However, you can continue managing your own affairs as long as you're able. Springing and healthcare powers typically become effective only when you cannot make or communicate healthcare decisions yourself.
Your power of attorney terminates:
- When you die
- If you revoke it in writing
- When your agent resigns or becomes unable to serve with no named alternate
- Upon divorce, if your spouse is your agent
- When a court invalidates the document
Keep Your Power of Attorney Updated Regularly
Like all estate planning documents, your Pennsylvania power of attorney should be reviewed regularly with your lawyer to ensure it still meets your needs. Consider updating your power of attorney when:
- Your relationship with your named agent changes
- Your agent moves away or develops health problems
- You move to a different state
- Your assets or financial situation changes significantly
- Pennsylvania laws regarding powers of attorney change
- Your healthcare wishes or treatment preferences evolve
Regular reviews of your will and powers of attorney with your Paoli estate planning attorney, typically every three to five years, help to keep your documents current and effective.