Quick answer
Under 20 Pa.C.S. Section 5601, a Pennsylvania financial power of attorney must be dated and signed by the principal. The signature must be acknowledged before a notary and signed by two adult witnesses. The document must start with a notice the principal signs, and the agent can't act until they sign an acknowledgment of their duties.
For retirees and their adult children in Tamaqua, Lehighton, Nesquehoning and the rest of the region, a power of attorney is one of the most practical estate planning documents a family can have. Pennsylvania's rules for signing one are specific, and a document that misses a step can cause problems just when it is needed most.
What is a power of attorney?
A power of attorney is a written document in which one person, the principal, gives another person, the agent, legal authority to act for them. A financial power of attorney usually covers matters such as banking, paying bills, managing investments and dealing with property.
A durable power of attorney stays in effect if the principal later becomes unable to manage their own affairs. For many older adults, that durability is the main reason to have one.
What does Pennsylvania law require to sign a valid power of attorney?
The execution rules are in Title 20, Section 5601 of the Pennsylvania Consolidated Statutes. Under the current statute, a power of attorney must be:
- Dated and signed by the principal. If the principal can't sign, another person may sign at the principal's direction, or the principal may sign by mark.
- Acknowledged before a notary public or another officer authorized to take acknowledgments.
- Witnessed by two adults who also sign the document.
The statute also says the notary cannot be the agent named in the power of attorney. It places limits on who may serve as a witness as well, so check those details before the signing.
What is the notice at the beginning of the document?
Section 5601 requires every power of attorney to begin with a notice, printed in capital letters and signed by the principal. The notice explains the powers being granted and the agent's duties, including that the agent must use due care to act for the principal's benefit.
The notice also has a practical effect. Under the statute, if the principal did not sign it and someone challenges the agent's authority, the agent must prove that they used that authority properly.
What is the agent's acknowledgment?
The agent has a step to complete too. Under Section 5601, the agent has no authority to act until they sign an acknowledgment that is attached to the power of attorney. By signing, the agent agrees to:
- Act in line with the principal's reasonable expectations, as far as the agent knows them, and otherwise in the principal's best interest
- Act in good faith
- Act only within the authority the document grants
This is a good time for families to talk openly. The person you name should understand what the role involves before signing.
Is a health care power of attorney different?
Yes. A financial power of attorney covers money and property. Decisions about medical treatment are usually handled in a separate health care power of attorney or advance directive, and Pennsylvania has separate rules for those documents. Many people sign both at the same time as part of an overall plan.
Why does a power of attorney matter in retirement planning?
Illness, a stroke or memory loss can happen suddenly. If no valid power of attorney is in place, family members may have to ask a court to appoint a guardian before they can handle the person's finances. That process can take time and money and is often stressful.
A power of attorney also works alongside other planning decisions, such as who can talk with an insurance company about a long-term care claim or help manage retirement income. For Schuylkill County families, it is one piece of a larger estate planning conversation that ties into your retirement planning.
Where should you start?
Stonebridge Planning Group, an independent, education-first planning firm in Tamaqua, helps local families think through how documents like a power of attorney fit into their overall estate and retirement planning goals.
The requirements described here come from the statute, but whether a particular document is valid, and which powers it should include, are legal questions. Have a Pennsylvania attorney prepare or review your power of attorney, and talk with a professional about your own situation.
This article is for general educational purposes only and is not individualized financial, tax, legal, or insurance advice. Rules and figures change, so please talk with a qualified professional about your own situation.