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DURABLE POWER OF ATTORNEY The appointment of an Attorney-in-Fact or agent, enables that person to act on his or her (Principal’s) behalf. Pennsylvania Powers of Attorney Pennsylvania,
recently passed a law provides that all Powers of Attorney are durable unless
stated otherwise. In
addition, on April 14, 2000 an act passed by the Pennsylvania Legislature became
law and significantly affects the law of Powers of Attorney. There
is also new terminology: the person
granting the power of attorney will be called the Principal and the person
appointed to act on the principal’s behalf would be called the Agent. There
is also a disclosure required at the beginning of the Power of Attorney (POA) advising
the Principal of all the powers that
he or she is granting to the Agent. It
also provides for an Acknowledgement
to be signed by the Agent stating the Agent’s duties and responsibilities and
making it clear that all transactions with respect to the property subject to
the power of attorney are exclusively for the benefit of the principal. Benefits: Affords the principal the ability to designate who will act
on his or her behalf without probate court intervention, i.e. guardianship, in
the event of his or her incapacity. These
costs can be significant and can be avoided for the relatively small fee for a
POA. Concerns: Depending on local law, the power may be effective upon the
execution of the instrument. In
this regard, there are several options. The
power of attorney can be held and not delivered to the agent until a later date
or upon the occurrence of a specific event.
This is called a “springing” Power of Attorney.
Also Powers of Attorney can have other terms included such as (although sometimes
cumbersome), a condition that before the power of attorney is effective, a letter
from one or two doctors stating that the Principal is not able to act on his or
her own behalf. Some doctors may be
unwilling to sign such a letter. Tax
Advantages. If specifically authorized, the agent can make gifts and
reduce the Principal’s taxable estate. Local
counsel must be consulted for the proper format and execution of the documents. Ó 2000 James
W. Pearson, Jr., All Rights Reserved FOR ADDITIONAL INFORMATION CALL THE TOLL FREE HELP LINE 1-800-232-1477 E-mail: lawyer@lawwalk.com JAMES
W. PEARSON, JR. Chair of the Federal & State Credit Union Department & Coordinator of legal consultations under the Family Legal Care Plans offered to credit union members. |
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