For the Defense - Vol. 9, Issue 3 - 51

any less restrictive alternatives to guardianship, like a principal's
execution of financial powers of attorney and health care powers
of attorney.5
After satisfying all ethical requirements, the attorney
can begin to consider the statutory requirements of powers of
attorney.
Financial powers of attorney are creatures of statute; a close
reading of the statute presents specific parameters for the
document.6
The power of attorney must begin with a statutory
notice that states that, with execution of this document, the
principal is relinquishing significant power to the appointed
agent.7
Every bank will want to see the signed and dated notice
page on the front of the document. Capacity to execute a financial
power of attorney requires that the principal understands the
plain language of the statutory notice, the financial power given
to the agent and the assets subject to such power.8
In addition to
signing and dating the notice, the principal must execute financial
power of attorney in the presence of two uninterested witnesses
and a Notary Public.9
Pennsylvania financial powers of attorney
are presumed to be durable, meaning that the agent's powers
are effective upon signing and the validity of the document is
not affected by the principal's capacity, disability, or the lapse of
time.10
The appointed and then-acting agent must also accept their
fiduciary role by signing and dating an acknowledgement, the
substance of which, again, is described specifically in the statute.11
An agent is expected to act in good faith, within the scope of
granted powers, and " act in accordance with the principal's
reasonable expectations to the extent actually known by the
agent and, otherwise, in the principal's best interest. " 12
So long
as the agent acts according to their duties, they shall not be held
liable as follows:
(1) to a future estate beneficiary for failure to preserve
the estate plan;
(2) solely because the agent benefits from an action,
which also benefits the principal; or
(3) if the value of the principal's property decreases.13
The legislature has provided a detailed road map outlining the
principal's capacity, expectations for execution, and the agent's
duties and responsibilities.
Pennsylvania's financial power of attorney statute also directs
that certain powers must be specified in detail to be operative.
Overlooking certain terms or not describing such terms in
completeness can significantly limit an agent's options in the
moment of crisis. For example, if a principal gives the agent
authority to gift in a financial power of attorney, it is presumed
that said gifts are limited in value to the then-current annual
exclusion amount (which in 2024 is $18,00014
), and that gifts are
limited in scope to be consistent with the principal's estate plan,
assets, minimization of taxes, eligibility for government aid, and
historical gifts.15
Although limited gifting may make sense to a
principal with capacity, limited gifting will restrict the agent's
options in long term care planning. A skilled drafter considers all
the principal's potential needs in completeness. If everything is
not addressed in specificity, the agent's hands may be tied.
Like financial powers of attorney, the requirements health
care powers of attorney, advance directives for health care, and
living wills are described in depth by Pennsylvania statute.16
legislature even provides an example of an advance directive for
The
health care (a combined health care power of attorney and living
will) written in the statute.17
To delegate health care decision
making powers, a principal must execute a health care power of
attorney, advance directive for health care or living will in the
presence of two uninterested witnesses.18
Although a Notary
Public is not required, execution in the presence of one is advised
nonetheless just in case another jurisdiction may require it.
A health care power of attorney must identify the principal,
appoint a health care agent, and delegate to the agent the
power to make health care decisions on behalf of the principal.
A properly executed health care power of attorney is valid until
revoked by the principal, by a court of law, or upon authorization
of the court.19
A principal cannot appoint an unrelated doctor or
employee of a health care provider as agent, but the principal can
direct an agent to seek the advice or opinion of a certain doctor
or health care provider.20
Unlike financial powers of attorney,
where the delegation of power related to finances typically is
not related to the principal's capacity, the delegation of power
related to health care decisions is effective when the principal
is not competent to make such health care decisions.21
For a
principal to be considered competent, the statute requires that
an health care provider can document that a principal can do the
following:
(1) Understand the potential material benefits, risks and
alternatives involved in a specific proposed health
care decision;
(2) Make that health care decisions on his own behalf;
and
(3) Communicate that health care decision to another
person.22
When competent, a principal maintains autonomy and control
over health care decisions.
A living will becomes operative when an individual is
determined to be incompetent and to have an end-stage medical
condition or to be permanently unconscious. A properly executed
living will is valid until revoked by the principal (regardless of
their mental or physical state).23
Living wills define the type of
artificial life-sustaining treatment an individual desires or directs
at the end of life. The principal can describe treatment options as
permissive or directive. A principal can appoint an agent in his
or her living will to make such health care decisions, but also, if
a living will is on file with a health care provider, said provider is
bound by the direction of the living will.24
Although it is the best-case scenario that the agent is aware of
the principal's wishes and desires related to health care decisions
in completeness, often this is not the case. The statute gives
health care agents specific and thorough direction establishing
a process required to make health care decisions.25
The agent's
described process includes, but is not limited to, gathering
information regarding prognosis, diagnosis and treatments;
distinguishing between curative options, palliative care, and
artificial life sustaining treatment; and consulting with health
care providers.26
known values including religious and moral beliefs.27
Agents are instructed to respect the principal's
If the agent
does not know the principal's values, the statute directs the agent
to balance the principal's best interest specifically related to
preservation of life, relief from suffering, and the potential for
restoration of functioning. 28
Vol. 9, Issue 3 l For The Defense 51
For the Defense - Vol. 9, Issue 3

Table of Contents for the Digital Edition of For the Defense - Vol. 9, Issue 3
