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Financial and Healthcare Power of Attorney

A carefully drafted power of attorney document is as important as your will. Planning ahead for disability enables your children or another trusted person to act in your best interests should you become incapacitated.

Pennsylvania's power of attorney law was recently changed.  Power of attorney documents signed after January 1, 2015 must meet certain statutory requirements in order to be valid. These new requirements include statutory notice provisions and new witnessing requirements.  Additionally, specific language must be in the document in order to grant certain powers to your agent. If the correct language is not in the document, then your agent will not have the authority to take certain actions. 

 A power of attorney document designates one or more people who you trust to act "as agents" on your behalf.  A power of attorney (POA) is an important estate planning document for everybody to consider, not just senior citizens. You can grant broad or limited authority. Generally speaking, one POA document is prepared for financial matters, and a separate POA document is prepared for healthcare matters. The healthcare power of attorney often contains "advance directive" language providing guidance for end-of-life decisions. An advance directive is also commonly known as a living will.

Spouses are not Automatically Agents of Each Other

Spouses are not "automatically" power of attorney for each other. They may be able to access jointly owned bank accounts, but their authority for each other will not automatically extend to real estate matters, life insurance, annuities, or retirement accounts that are individually owned. Power of attorney documents are needed if you wish for your spouse to have this authority.

Must be of Sound Mind

Power of attorney documents need to be prepared while you are of sound mind. If a person becomes incapacitated but has not signed power of attorney document, then it is too late for that individual to sign a POA, and guardianship proceedings may be necessary.

Guardianship proceedings can be expensive and are sometimes contested. If you have a person in mind to help who is both capable and trustworthy, it is preferable to prepare a power of attorney.  A POA needs to be signed before incapacity occurs. A person who lacks mental capacity and can not understand what they are signing can not execute a valid power of attorney.

Controls and Safeguards

A general durable power of attorney for financial matters can be drafted to allow your agent to do anything that you could do yourself, or you can convey only limited authority. You may wish to have two signatures required for certain actions.

Some documents prohibit certain powers. For example, you may wish to prohibit your agent from making gifts of your property, or at least limit that authority. Additionally, you may wish to limit your agent's ability to change the beneficiary designations on your life insurance and retirement accounts.

Accountability is a sound business practice, and it can be a good idea to require your agent to provide annual accountings to certain third parties, or at least allow others to see the financial statements and copies of checks that are being written. These safeguards should be professionally drafted and tailored to your situation.

Health Care Provisions in a Power of Attorney

The law allows an agent, appointed by you in your power of attorney, to make arrangements for your healthcare and sign admission paperwork for hospitals or other medical facilities. Your agent may, with respect to your admission to a facility, execute consent or admission forms required by the facility and enter into agreements for your care. The law also allows you to authorize your agent to arrange for and give consent for medical, therapeutic, and surgical procedures, including the administration of medications. At Gerhard & Gerhard, P.C., we prepare a healthcare power of attorney that is separate from your financial power of attorney document.

Advance Healthcare Directive (Living Wills)

An advance healthcare directive, also known as a living will, states your wishes regarding the refusal of certain life-sustaining treatments when you are permanently unconscious or in an end-stage condition as determined by two physicians.

A living will should name a “surrogate” decision-maker to implement your end-of-life wishes. Hospitals and nursing homes provide patients with information concerning living wills but cannot legally force you to sign one. The advance directive should be tailored to meet your specific desires and can express your wishes to (or not to) make an anatomical gift. One copy of your living will should be given to your primary care physician who will place it in your medical records.

Allow our office to guide you through the planning process. Your power of attorney documents will be much better than any stock forms you could ever find online, and we guarantee that they comply with Pennsylvania law. It won't take long, and by planning ahead you and your family can avoid costly guardianship proceedings.


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