Detailed Answer

This answer explains, in plain language, what powers a financial power of attorney (POA) can give an agent under Pennsylvania law, how those powers work if you become unable to manage your finances, and practical limits and safeguards to consider. This is general information only and not legal advice.

What law applies?

Pennsylvania follows the state Power of Attorney Act (the Uniform Power of Attorney Act), which governs how financial powers of attorney are created, interpreted, and used. See 20 Pa.C.S. § 5601 et seq. for the statutory rules and definitions: 20 Pa.C.S. (Title 20). For practical information and forms, the Pennsylvania Courts website is helpful: PA Courts: Power of Attorney.

Core concept: durable vs. non-durable powers

A financial POA becomes durable when it contains language saying the authority continues if you become incapacitated. If it is durable, the agent can keep acting after you lose capacity. If it is not durable, the agent’s authority usually ends when you become incapacitated. Make sure the document clearly says whether it remains effective on incapacity.

What powers can you give your agent?

You can grant very broad authority or narrow, itemized authority. Common powers include:

• Banking and cash management: access accounts, deposit and withdraw funds, endorse checks, open or close accounts, and arrange transfers.
• Bill paying and budgeting: pay routine bills, manage monthly expenses, and maintain financial records.
• Tax matters: prepare, sign, and file tax returns; respond to tax authorities; and claim refunds.
• Real estate transactions: buy, sell, refinance, lease, or manage property on the principal’s behalf (often requires notarization and may require recording the POA).
• Insurance and benefits: manage homeowner’s, auto, or other insurance; make claims; and collect benefits.
• Retirement and investment accounts: manage IRAs, 401(k)s, brokerage accounts, and make investment decisions consistent with any instructions you give.
• Business interests: operate or manage a business you own if the POA explicitly authorizes that.
• Claims and litigation: start, defend, or settle lawsuits on your behalf when authorized.
• Gifting and transfers: make gifts or transfers if you authorize those powers explicitly. Because gifting can affect eligibility for public benefits and estate plans, many POAs either limit gifting or spell out precise rules.
• Digital assets and electronic access: access and manage online accounts, subject to provider rules and explicit authorization.

Practical limits and safeguards

• Unless the document clearly says otherwise, the agent cannot make or change your will. A POA typically does not allow an agent to sign a new will for the principal.
• Gifting powers should be explicit. If you want your agent to make gifts or transfer assets, say so in writing and describe limits.
• Some institutions (banks, title companies) may require the POA to be notarized and may ask for an original document or specific statutory language before they accept it for real estate or large transactions.
• The agent cannot act after your death. The authority granted by a POA ends at the principal’s death; estate executors or personal representatives then control the estate.

Agent duties and legal protections

An agent owes fiduciary duties: act in your best interest, avoid conflicts of interest, keep accurate records, and follow any instructions in the POA. Third parties that reasonably rely on a properly executed POA generally get statutory protection under Pennsylvania law. If an agent misuses authority, the principal (or the principal’s estate) may pursue civil claims or, in some cases, criminal charges.

How to make a POA effective in Pennsylvania

1. Sign the document while you are competent. The principal must have the capacity to understand the nature and effect of the POA when signing.
2. Include a clear durability clause if you want the agent to act after incapacity.
3. Have the document notarized. Many banks and title companies require notarization. Notarization also helps if you need to record the POA for real estate transactions.
4. Consider including specific instructions or limits for sensitive powers (business control, gifting, retirement account withdrawals).
5. Give copies to your agent, family members, and institutions (banks, investment firms) and tell them where the original is stored.

Common scenarios — examples

Example A — Durable POA for routine finances: You sign a durable financial POA that allows your agent to pay bills, handle banking, and manage investments. After you develop dementia and can’t handle money, the agent continues to pay bills and manage accounts without a court guardianship.

Example B — Real estate sale: Your agent is given explicit authority to sell a parcel of real estate. When a buyer’s title company asks, the agent produces the notarized POA and any required county recording to complete the sale.

Example C — Limited POA: You grant a limited POA just to transfer a single car title. The agent can only act for that specific purpose and no other financial matters.

When a POA won’t help

• If you die, the POA ends and cannot be used to administer your estate.
• If the POA is invalid (signed when you lacked capacity or not properly executed), third parties may refuse to accept it and a court may need to appoint a guardian or conservator.
• If the agent acts outside the authority or breaches duties, you or your family may need to go to court to stop the agent and seek remedies.

Where to get more information and forms

See Pennsylvania statute authority (Title 20) for the detailed rules: 20 Pa.C.S. (Title 20). For practical guides and sample forms, use the Pennsylvania Courts resource: PA Courts: Power of Attorney.

Helpful Hints

• Make the POA durable if you want it to remain effective after incapacity; include explicit “durability” language.
• Choose a trustworthy agent. The agent will have broad access to your money and property if you permit it.
• Be specific about gifting, business control, and real estate to avoid disputes or bank refusal.
• Notarize the document and keep the original in a safe, accessible place. Provide copies to institutions and family members.
• Review and update the POA after major life changes (marriage, divorce, new children, change in health, or relocation).
• Keep clear records: ask your agent to keep receipts and a ledger of transactions made on your behalf.
• If a bank or company refuses the POA, ask for a written explanation and consider consulting an attorney or the county recorder about recording the POA for real estate matters.

Disclaimer

This article explains general rules under Pennsylvania law and common practice. It is educational only and not legal advice. Laws change and every situation is different. For advice tailored to your facts, consult a licensed Pennsylvania attorney.