Do you have a New Year resolution to “get your house in order?” A Financial Power of Attorney (POA) document is probably the most important document to have.
What is a POA? A POA is a written document created by a person (the “Principal”) to authorize another person or entity (the “Agent”) to act on behalf of the Principal in legal and financial matters.
Who should serve as the Agent? The Agent should be someone who is trustworthy and will follow your wishes. It does not have to be a family member.
What if I do not have a relative or close friend to serve as my Agent?Private organizations and banks can serve as your Agent, usually for a fee.
Can my Agent be paid for helping me? Yes, however, you would not want to give your Agent money sporadically or informally. A legal contract should be created with the Agent, which sets out the services that your Agent is providing and the amount of compensation. Your Agent should declare the compensation on his or her income tax return so that it does not appear that you are giving your Agent a gift.
How much power will my Agent have? There are some powers that are presumed which are listed in the Pennsylvania POA Law and there are other powers that must be specifically authorized in the document.
What if my Agent does not follow my wishes? The Agent could be held both criminally and civilly liable for not following your wishes as they are stated and going outside of the scope of authority granted in the document.
Can I change my mind about who I want to serve as my Agent? Yes, as long as you have capacity to create a POA.
When does a POA become effective? A POA can be effective immediately upon signing, or a “springing” POA can become effective upon the occurrence of a specific event noted in the document (such as incapacity).
Is a POA Agent the same as an Executor of a will? No, the POA Agent acts for someone during their lifetime; whereas an Executor of a Will acts for the person after he or she has died.
It is important for everyone to realize that they not only need a POA, but also that the appropriate language be detailed in the POA in order to meet your goals and expectations.
If you still have questions about elder law in general or a specific topic related to elder law, please visit https://keystoneelderlaw.com/eventscalendar/ for a listing of free seminars. The topics covered by these weekly seminars change every month. * Jessica F. Greene, CELA,* LL.M. in Elder Law is certified as an Elder Law Attorney by the National Elder Law Foundation