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3 Kinds of POAs in Pennsylvania

On Behalf of | Mar 4, 2021 | Estate Planning

A power of attorney is one of the most important tools in the estate planning toolkit. People use these versatile documents to accomplish a variety of goals.

In general, a power of attorney gives one person, called the agent, the legal authority to make certain decisions on behalf of another person (the principal). The agent’s decisions and actions are legally binding, just as if they were the principal’s own actions. People often use different types of POAs to fulfill different functions. Pennsylvania law recognizes three main kinds of powers of attorney.

Durable power of attorney

A durable power of attorney may give the agent power to make legal, financial or healthcare decisions on behalf of the principal. The agent must act in the principal’s best interest; the POA may also place other restrictions on the agent’s authority. Durable POAs remain in effect until the principal’s death. As of 1992, courts presume all Pennsylvania POAs to be durable unless they specifically provide otherwise.

Limited power of attorney

A limited power of attorney, sometimes called a simple POA, is the opposite of a durable POA. A limited POA is typically effective for a short time, usually for the duration of a specific transaction. Limited POAs usually contain specific instructions and conditions for the type of decisions the agent may make on the principal’s behalf. For example, a limited POA might direct an agent to attend a real estate closing and pay closing costs on behalf of the principal.

Springing power of attorney

A springing power of attorney only becomes effective upon the occurrence of a specified event. Most often, the triggering event is when the principal becomes mentally or physically incapacitated.

A POA is a useful device to have in the event that a person is unable to make his or her own decisions.