Powers of Attorney

Pennsylvania's power of attorney statute (20 Pa.C.S. Chapter 56) allows you to appoint an agent to handle your financial affairs. A durable financial power of attorney remains effective even if you become incapacitated — which is precisely when you need it most.

Execution Requirements (Act 95 of 2014)

Since January 1, 2015, Pennsylvania requires all three of the following for a valid financial POA:

• Notarization — the principal's signature must be notarized
• Two witnesses — two adults (age 18+) who are not the named agent must witness the signing
• Statutory notice — the first page must contain the specific statutory warning language from § 5601(c), alerting the principal to the powers being granted. This is not a generic "I understand" statement — it's a prescribed text that must appear verbatim.

A POA that fails any of these requirements is void. This is the most common problem we see with internet-form POAs — they either omit the statutory notice, lack the witness requirement, or use the pre-2015 format. If your POA was signed before January 1, 2015, it's still valid under the law in effect when it was executed — but it's worth reviewing to ensure it includes the powers you actually need.

The Agent's Mandatory Duties — § 5601.3

Act 95 also created three duties the agent must follow, and the principal cannot waive them:

• Act in accordance with the principal's reasonable expectations (to the extent actually known) and otherwise in the principal's best interest
• Act in good faith
• Act only within the scope of authority granted

These are non-negotiable. A POA that tries to eliminate the duty of good faith or authorize the agent to act contrary to the principal's interests is unenforceable on those points.

"Hot Powers" — § 5601.4: The Powers That Must Be Expressly Granted

This is where most generic and internet-generated POAs fail. Pennsylvania law identifies specific powers that are not included in a general grant of authority — they must be specifically and expressly authorized in the document. These "hot powers" include:

• Make a gift — including gifts for Medicaid planning, annual exclusion gifts, and charitable gifts
• Create, amend, revoke, or terminate a trust — essential for elder law planning
• Change a beneficiary designation — on life insurance, retirement accounts, or TOD/POD accounts
• Delegate authority granted under the POA
• Waive the principal's right to be a beneficiary of a joint and survivor annuity or retirement plan
• Exercise fiduciary powers that the principal has authority to delegate
• Disclaim property, including a power of appointment

If your POA does not specifically include these powers and you need your agent to make gifts, create trusts, or change beneficiaries — for instance, as part of a Medicaid crisis plan — your agent cannot do it. The family's only option at that point is a guardianship proceeding ($3,000–$10,000+) to get court authority for what a $300 document should have covered.

Section 5601.4(b) adds a further restriction: agents who are not a spouse, parent, child, grandchild, or sibling of the principal face additional limitations on hot powers. The POA can be drafted to opt out of these limitations, but only if the drafter knows they exist.

The Bank Can't Just Say No — § 5608.1

Under 20 Pa.C.S. § 5608.1, a third party (including a bank, brokerage, title company, or any financial institution) presented with a valid POA must accept it within strict timeframes:

• 7 business days to accept — or to request additional documentation (a certification under § 5606, a translation, or an opinion of counsel)
• If additional documentation is requested: 5 business days after receiving it to accept
• The institution cannot require its own proprietary POA form as a substitute for the authority granted in your POA (§ 5608.1(a)(3)). This is the provision most banks violate.

What Happens If They Refuse Anyway?

A person who refuses to accept a valid POA in violation of § 5608.1 is subject to:

• Civil liability for pecuniary harm to the principal's economic interests caused by the refusal — meaning the bank pays damages
• A court order mandating acceptance — the court can order the bank to honor the POA immediately

In practice, a letter from an attorney citing § 5608.1 and the specific statutory deadlines resolves the problem within days. Banks have compliance departments that understand the statute even when the branch-level employees don't. The letter puts the bank on notice that refusal creates liability — and banks don't like liability.

When a Bank Can Legitimately Refuse

The statute is not unlimited. A bank may refuse to accept a POA if:

• The bank has a good faith belief that the POA is not valid or the agent doesn't have authority for the requested act
• The bank has actual knowledge that the POA has been revoked or the principal has died
• The bank has reported a suspected elder abuse concern to the local protective services agency under the Older Adults Protective Services Act
• The bank has been served with a court order restricting the POA or the agent
• The request would violate federal law or regulation (think BSA/AML compliance)

But "our policy requires our own form" and "this POA is more than a year old" are not legitimate grounds for refusal. An otherwise valid POA does not expire due to age alone — § 5604(b) provides that a durable POA is valid "notwithstanding the lapse of time since its execution" unless the document itself states a termination date.