Saturday, November 19, 2016

What is that NOTICE on the front of my Power of Attorney?

[The following article was written by my colleague, Elizabeth White, Certified Elder Law Attorney* of Marshall, Parker and Weber]

It is human nature to get nervous when we see the word “NOTICE”. After all, this word is usually associated with something important and of a legal nature. You may relate “NOTICE” to a negative experience, such as capital letters on top of a parking ticket, a mistakenly unpaid bill, or marking a location’s rules, like no swimming allowed.
If you have signed a financial power of attorney in Pennsylvania, you have also run across the word “NOTICE”. It is hard to ignore, as it is in all capital letters at the beginning of the power of attorney document and the paragraphs following the word “NOTICE” are also in all capital letters.
While this may make you anxious, it is there for good reasons. If you understand the notice page and what you are signing, this nervousness should turn to peace of mind.
The notice page serves as a warning to you, the person who is going to sign a financial power of attorney, that you are giving considerable power to another person to handle your financial affairs. The page is meant to put you into a frame of mind to be attentive to what you are signing, voice any questions about what it means, and consider that the person you are naming in the document to help you is trusted.
The notice page outlines the purpose of a financial power of attorney. It explains that the person signing the document (the principal) is giving broad powers to another person or persons (the agent(s)) to handle the principal’s property.
The notice describes that your agent may have certain powers over your property, such as the power to sell real or personal property, should you choose to include this power in your financial power of attorney. The powers given in a power of attorney can be broad. These powers can affect your property while you are alive, or change what is distributed through your estate plan when you pass away.
The notice explains that your agent does not have a duty to use the powers granted in the document, but if you agent does exercise those powers, he or she must act for your benefit and only in accordance with what the power of attorney document allows your agent to do.
It also states that if your agent knows what you would want in a particular situation, your agent is to act in accordance with your reasonable expectations. If your agent does not know your wishes, your agent is to act in your best interest. Your agent must always act in good faith.
The notice advises you that the power of attorney will be durable, unless otherwise stated in the document. “Durable” means that your agent can continue to act throughout your lifetime, including when you are incapacitated. This makes sense, because in most situations a power of attorney document is needed when you are incapacitated. Of course you retain the right to revoke the power of attorney, or the court can terminate your agent’s authority.
This notice is required by Pennsylvania law for Financial Powers of Attorney. It must be signed by the person executing the power of attorney. The Pennsylvania law explains that if a challenge occurs as to whether the agent had the authority to act, and the signed notice page is not included with the document, the agent has the burden to prove that the actions that he or she took were proper.
Unfortunately, powers of attorney completed using internet forms, online services, or by attorneys that do not regularly practice in the field of estate planning and elder law often do not include a proper notice page. Additionally, the notice itself informs the principal that is signing that they should seek the advice of an attorney to counsel on these powers. Unless you have the document reviewed by an experienced lawyer who is familiar with you and your goals, you may be signing a power of attorney that:
  • includes powers you would not want your agent to have, or
  • includes powers that you do not understand, or
  • does not include essential powers that you would want your agent to have.
If you reside in Pennsylvania and have a power of attorney without a notice page, or have questions or concerns about the powers included (or not included) in your current financial power of attorney, one of the elder law attorneys at Marshall, Parker and Weber would be happy to meet with you to review your power of attorney document.
*Elizabeth White is Certified as an Elder Law Attorney by the National Elder Law Foundation

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