The Short Answer

In Pennsylvania, a power of attorney (POA) can still be valid even if the principal has dementia and has never been declared incapacitated by a court—as long as the principal had sufficient mental capacity at the time they signed and the document meets Pennsylvania’s execution requirements. The risk is that dementia often leads to later challenges claiming the principal lacked capacity or was pressured, which can put the agent’s authority (and transactions) in jeopardy.

What Pennsylvania Law Says

Pennsylvania law allows a person (the “principal”) to grant authority to another person (the “agent”) through a written POA. A POA is typically intended to keep working even if the principal later becomes incapacitated, which is the point of a “durable” POA.

The Statute

The primary law governing this issue is 20 Pa.C.S. § 5601.

This statute establishes that a POA must be properly executed (dated and signed by the principal, acknowledged before an authorized official, and witnessed by two qualified witnesses) and must include the required statutory notice signed by the principal, with the agent also signing an acknowledgment before acting.

In addition, Pennsylvania generally treats POAs as durable unless the document says otherwise. See 20 Pa.C.S. § 5601.1 and the durable POA provisions in 20 Pa.C.S. § 5604.

What dementia changes is not the existence of a “formal incompetence finding,” but whether the principal had the legal capacity to understand what they were signing at the moment of execution. Dementia can be mild, moderate, or severe, and capacity can fluctuate—so the facts and evidence around the signing matter.

If you are dealing with a POA signed in another state (your question mentions North Carolina), Pennsylvania has rules for recognizing out-of-state POAs. See 20 Pa.C.S. § 5611.

Why You Should Speak with an Attorney

While the statutes provide the general rule, applying it to a dementia situation is rarely simple. Legal outcomes often depend on:

• Strict Formalities: If the POA was not executed exactly as Pennsylvania requires (including the statutory notice, notarization/acknowledgment, and two qualified witnesses), financial institutions and family members may refuse to honor it or may challenge it in court. See 20 Pa.C.S. § 5601.
• Burden of Proof in a Challenge: Dementia-related disputes often turn into evidence battles about what the principal understood on the signing date (medical records, witness testimony, timing of diagnosis, and whether the agent benefited). Even a “valid-looking” document can be attacked if capacity or undue influence is alleged.
• Guardianship Interaction: If a court later appoints a guardian, the court can determine whether—and to what extent—the durable POA remains in effect. See 20 Pa.C.S. § 5604. This can create real-world problems for paying bills, selling property, or managing accounts if family members disagree.

If you’re worried a POA was signed too late in the dementia process (or you’re an agent trying to use a POA and getting pushback), it’s smart to get legal advice early—before a bank freeze, a disputed real estate closing, or an Orphans’ Court fight forces the issue.

For more background on related disputes, you may find these helpful: Guardianship vs. durable power of attorney in Pennsylvania and evidence of undue influence or lack of capacity.

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Disclaimer: This article provides general information under Pennsylvania law and does not create an attorney-client relationship. Laws change frequently. For legal advice specific to your situation, please consult with a licensed attorney.