FINANCIAL POWER OF ATTORNEY
A General Durable Power of Attorney instrument is a powerful document wherein you, as the Principal, appoint an Agent. By executing this document you grant your Agent the power and authority to handle your personal and financial matters during your absence or disability. The powers are effective immediately and are “durable” (meaning that they remain in effect even after incapacity). The powers are of no effect after death.
This authority grants the Agent the power to pay your household bills, to make investment decisions, to file your tax returns, to pay taxes, to handle your retirement accounts and to perform any other duty that you would ordinarily do for yourself (but because of incapacity are no longer able to do). If you so choose, your Agent may have the power to change life insurance and retirement account beneficiary designation forms. The only significant authority not permitted in a Power of Attorney instrument is the power to make a new Will.
Pennsylvania law provides the spectrum of powers generally included in a financial Power of Attorney. Depending on your age and goals, your individual Power of Attorney may limit or broaden these standard statutory powers.
An alternative choice to a General Durable Power of Attorney is a Springing Power of Attorney. Unlike a General Power of Attorney instrument, a Springing Power of Attorney becomes effective at a future date and “springs up” upon the happening of an event specified in the instrument by the Principal (such as the Principal’s incapacity). Usually, the Principal’s physician determines whether the Principal is competent to handle his or her legal affairs and whether or not the Agent should act.
There are other differences between the two (2) Power of Attorney instruments. The pros and cons of each type of instrument should be discussed with your attorney. No matter what your decision is, a Power of Attorney instrument is the one estate planning instrument that will afford you the most financial protection before and during incapacity.
DISCLAIMER: This information is not intended as legal advice and should not be construed as such.
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Law Offices of Rise P. Newman, LLC
1515 Market Street
Suite 1520
Philadelphia, PA 19102
Tel: (215) 670-0055
Fax: (215) 557-0322
Rise P. Newman, Esq. E-Mail: rise@risenewmanlaw.com
Lisa A. Holland, Esq. E-Mail: lisa@risenewmanlaw.com
