Have you ever wondered what would happen if you became incapacitated, unable to make decisions about your financial and medical affairs? This frightening scenario is why you should consider designating a power of attorney. Under Pennsylvania law, you have the ability to choose to appoint someone to run your affairs if you become incapable of doing so because of a medical condition or an accident. A power of attorney is a valuable part of estate planning, but there are many factors to consider when creating one. This is why it is crucial to work with an experienced estate planning attorney when drawing up a power of attorney.
What are the Types of Powers of Attorney?
There are four types of powers of attorney available in Pennsylvania. A general power of attorney grants full power of all of the signatory’s affairs. Unless specified, it will no longer be effective if the principal, the person granting the power of attorney, becomes mentally incompetent. As you may expect, a limited power of attorney is only for a specific purpose. Pennsylvania has forms of limited powers of attorney for financial matters and healthcare decisions. A springing power of attorney goes into effect upon the death or incapacity of the principal. Finally, a durable power of attorney is designed to designate someone to manage the affairs of the principal even if he or she becomes incapacitated. In Pennsylvania, unless the power of attorney specifies otherwise, it is deemed to be a durable power of attorney.
How are Powers of Attorney Created?
A power of attorney must be in writing and signed by the principal. There also must be two adult witnesses to the document, neither of whom can be the designated agent, and it must be signed before a notary public. The principal granting the power has to be mentally competent at the time of signing. It is also advisable to have a second person designated as agent in case the first designee is unable or unwilling to perform the duties.
How are Powers of Attorney Modified?
If the principal decides to modify an existing power of attorney, he or she must prepare and sign a new one under the same conditions as the original one, meaning having two witnesses present and signing it before a notary. The new power of attorney must explicitly state that it is revoking the prior one, and the principal must be mentally competent at the time of modification. Finally, if the original power of attorney was recorded, which is often the case if it was used for a real estate transaction, then the new one will need to be recorded as well.
How are Powers of Attorney Revoked?
The principal must provide the agent and any third party relying on the power of attorney with notice that the power of attorney has been revoked. In addition, if the power of attorney was recorded, then the revocation document must be recorded at the same government office. The principal must be mentally competent at the time of revocation in order for it to be effective.
What is the difference between Financial and Medical Powers of Attorney?
If you are concerned about how your affairs will be handled if you are incapacitated, then you are going to want to make sure to have powers of attorney to cover your financial and medical affairs. Pennsylvania law draws a distinction between the two.
Medical powers of attorney are also known as healthcare proxies, and they designate a person who will make healthcare decisions about you, including choice of treatment, admissions to hospitals and healthcare facilities, and end-of-life decisions, such as a DNR (do not resuscitate). These medical powers of attorney focus solely on healthcare decisions and are often limited or springing in nature. In other words, they will go into effect when you are no long mentally competent. You can include advanced directives, such as any end-of-life care decisions you want to make now.
Financial powers of attorney concern such things as paying bills, negotiating with creditors, handling bank accounts and investments, and dealing with your real and personal property. Unless for a specific matter, in which case you would use either a general or limited power of attorney, if you are planning to designate an agent to handle your affairs when you are incapacitated, then you will use a durable power of attorney for this purpose. Since this only concerns your financial affairs, it is vital to have a separate medical power of attorney to deal with your healthcare decisions. While it is common to have the same person designated as agent under both documents, you can choose to have different people handle these matters, although it could create some issues of coordination between them.
Contact an Estate Planning Attorney Today
Powers of attorney are a vital part of any estate plan. These allow your designated agent to spring into action as soon as you are incapacitated or upon your death. This allows your affairs to be handled seamlessly. The experienced estate planning attorneys at Jones Gregg Creehan & Gerace can assist you with preparing powers of attorney that will cover your needs. Contact us today for a consultation.