An important yet overlooked aspect of an estate plan is the power of attorney. Below are provisions that you should consider including when drafting your comprehensive estate plan.
Accounts and everyday financial transactions
Financial authority covers the routine responsibilities, including withdrawals, utility payments, insurance claims and tax returns. Because these needs can come up often, this may be the clause your agent relies on most.
A power of attorney generally remains effective after you lose capacity unless the document says otherwise. One document can therefore cover a short hospital stay, a longer decline or another period when you cannot manage finances on your own. Without it, your family may need to ask the orphans’ court to appoint a guardian, which takes some time to resolve.
Pennsylvania law also sets a timetable for the bank, which has seven business days to accept a notarized power of attorney or to request a written certification from your agent. Five more business days run once that certification arrives, and the bank may not require its own form.
Real estate and other major assets
A real estate provision can cover buying, selling, mortgaging and leasing land or a home, along with signing deeds and settlement documents at closing. Separate language might address other major holdings, such as a brokerage account or an interest in a family business.
A broad financial clause may still leave questions at closing. Naming these transactions directly can reduce the chance of delay while the title company confirms what your agent signed.
Limits, oversight and revocation
You may narrow any of these powers at the outset. The document covers a single transaction, require two agents to act together or take effect only after a stated event. This last option, known as a springing power of attorney, prevents your representative from acting before the triggering event occurs, though confirming that event may cause delays when you need help quickly.
Your agent must act for your benefit, generally keep your funds separate and maintain records of receipts, payments and other transactions. If questions arise about how the representative handled those responsibilities, a court might order an accounting. Financial institutions, relatives and others can also report suspected exploitation of an older adult to Pennsylvania’s protective services system.
While you retain capacity, you may revoke the arrangement at any time. Others can continue relying on it, however, until they know the authority has ended, so written notice to your agent and the financial institutions holding your accounts help prevent further use.