The most recent development in elder law news and legislation involves the change in the law regarding powers of attorney. First, a power of attorney is a document where a person authorizes another to act on his or her behalf. This commonly occurs when an elderly parent grants a power of attorney to a child to assist in their medical care. A power of attorney is a complicated document, if you do not include the correct language or follow procedure, the document could be void or later unenforceable.
There are a few changes following the inception of the power of attorney that affect you and your elderly loved ones. It is important that when constructing any health care directives, end of life planning, estate plans, etc., that you speak to an experienced elder law attorney.
Durable Power of Attorney
Before 2000 in Pennsylvania, all power of attorney documents had to designated if the document was to be “durable” or not. “Durable” means that at the time the person who created the document becomes incapacitated, the “agent” or representative remains authorized to act on the other behalf. The common law assumed all powers of attorney to be not durable unless designated.
The new law took into consideration the benefits of having a power of attorney remain durable should the creator become incapacitated, and thus changed the law. Now, all powers of attorney are assumed durable by adding a few specific phrases and titling the document “Durable Power of Attorney.” In addition, if one does not wish for a durable power of attorney, it must be specifically stated in the document.
Concerns over authenticity and elder coercion prompted Governor Corbett of Pennsylvania to enact Act 95, which went into effect on January 1, 2015. This created new procedures people seeking power of attorney documents must perform in order to prove genuineness.
The new procedures require two witnesses over the age of 18 to watch the creator of the power of attorney document sign the document. Then the witnesses must sign and attest to observing the creator sign the document first. This document must be signed by all participates in the presence of a notary and then finally notarized.
Lastly, a “revised warning notice” must be signed by the agent (person authorized to act on the other’s behalf) and the principle (the creator of the document). The document includes mandatory duties that the agent must abide by, a requirement to serve in the best interest of the principal, act accordingly to the principal’s reasonable requests, and to not act outside the scope of the document.
*These changes do not apply to health care planning documents.
Gifts and Transfers
It is unfortunate that in elder law, many attorneys must help clients that have been taken advantage of by their agents. One of the main ways the elderly are negatively affected by their designated agents is through unauthorized gifts and transfers of money and property. An agent might start taking property from the principle’s home thinking they do not need it anymore or start gifting themselves the principles property.
Changes made under Act 95 state that unless specifically stated in the power of attorney, an agent may not make gifts on a principal’s behalf. Related to this provision is the requirement that an agent must preserve the estate plan of the principle. If the principle (suffering from dementia now) gives their car away to a family member they have not talked to in years, it is the agent’s responsibility to make sure the car goes to the beneficiary designated in the estate plan. If the family member receiving the car is not that beneficiary, then the transfer must stop.
If you or a loved one need a power of attorney, your best resource is an attorney that specializes in elder law and is currently on the new developments in the law. Protecting yourself and your loved ones are one of the most important actions you can do for them and for yourself.
NOTE: This blog is for informational purposes only and does not constitute legal advice.