Your power of attorney is one of the most important legal documents that a retired person can have. If you do not have one, and you become unable to handle your affairs, the Court will appoint a bank, which will take over your entire estate, not your children.
When you give an individual authority to sign your checks, you are still in legal control. The individual named in the Power of Attorney is really an agent whose job is to assist you in the handling of your financial affairs.
In Pennsylvania, all powers of attorney are durable.
There is also a special power of attorney called a medical power of attorney. That individual can choose your doctor, hospital, obtain medical records for you and decide whether or not you should have an operation if you are unable to speak.
It is important for the attorney drafting a financial power of attorney to know what assets you have, since special wording is frequently required. For example, a general power of attorney is not enough to sell a beach house in New Jersey, or make gifts to children to reduce estate taxes unless it contains language giving special authority to do so.
If an individual is facing large losses due to nursing home expenses, the power of attorney needs to contain special language to enable savings permitted under the Medicare Catastrophic Coverage Act. If you do not have this, you can lose everything.
All banks and many brokerage houses have their own powers of attorney. You should use these because it makes administration simpler for those institutions. However, you need a “catchall” power of attorney for all those other things that could possibly come up in your life if you are unable to act.
Pennsylvania now has new requirements for a power of attorney. If your power of attorney document was written prior to the year 2000, it may not be adequate to carry out your estate plan.
Our office makes housecalls to individuals in nursing homes, hospitals and at home so that their rights will never be impaired by disability.