Tuesday, November 4, 2014

Don’t Use New Power of Attorney Forms before January 1, 2015



Pennsylvania has passed a new law that makes extensive changes to the rules governing powers of attorney (POAs). A POA is a vital legal document that allows someone else to manage financial and property matters for you in the event you are unavailable or become incapacitated.
In its many pages Act 95 of 2014 makes numerous changes to the law governing POAs. The most obvious changes are to the notice and acknowledgment forms that must be signed by the principal (the person creating the POA) and the agent.
The principal signs a notice form that contains state mandated information about the significance of the POA. Act 95 revises the language that is to be used in this notice.
The agent signs an acknowledgment form accepting the duties that go with acting as an agent, and agreeing to act in conformity with the principal’s expectations, in good faith and only within the scope of the authority granted in the document. The form must be in substantial conformity with the new language set out in the Act. An agent has no authority to act until he or she has signed this acknowledgment form and it is affixed to the POA document.   
Act 95 was signed into law on July 2, 2014. Since then I’ve noticed that some lawyers have already begun using the new notice and acknowledgment forms. This is a mistake.  
Act 95 delays the effective date for use of new forms in order to give everyone time to prepare for the change. The law says that its provisions regarding the use of the new forms are not effective until January 1, 2015. That means that the use of the old notice and acknowledgment forms remains mandatory until January 1, 2015.
The bottom line: Act 95’s provisions regarding the new language in notice and acknowledgment forms do not take effect until January 1, 2015. POAs signed before that date should continue to use the language and forms from the prior law.  
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