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| PRIOR PRINTER'S NO. 1270 | PRINTER'S NO. 2416 |
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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY GREENLEAF, ORIE, FONTANA AND LEACH, JUNE 3, 2011 |
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| AS AMENDED ON THIRD CONSIDERATION, SEPTEMBER 25, 2012 |
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| AN ACT |
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1 | Amending Title 20 (Decedents, Estates and Fiduciaries) of the |
2 | Pennsylvania Consolidated Statutes, in powers of attorney, |
3 | further providing for general provisions, for form of power | <-- |
4 | of attorney and for liability and for special rules for | <-- |
5 | gifts; providing for agent's duties and for principles of law |
6 | and equity; further providing for form of power of attorney, |
7 | for implementation of power of attorney and for liability; |
8 | providing for liability for refusal to accept acknowledged |
9 | power of attorney; and further providing for validity. |
10 | The General Assembly of the Commonwealth of Pennsylvania |
11 | hereby enacts as follows: |
12 | Section 1. Sections 5601(b), (e.1) and (e.2) and 5602(c) of | <-- |
13 | Title 20 of the Pennsylvania Consolidated Statutes are amended |
14 | and the sections are amended by adding subsections to read: |
15 | § 5601. General provisions. |
16 | * * * |
17 | (b) Execution.--A power of attorney shall be dated, and it |
18 | shall be signed [and dated] by the principal by signature or |
19 | mark, or by another individual on behalf of and at the direction |
20 | of the principal if the principal is unable to sign but |
21 | specifically directs another individual to sign the power of |
22 | attorney. [If the power of attorney is executed by mark or by |
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1 | another individual, then it] The power of attorney shall be |
2 | witnessed by two individuals, each of whom is 18 years of age or |
3 | older. A witness shall not be an agent appointed in the power of |
4 | attorney or the individual who signed the power of attorney on |
5 | behalf of and at the direction of the principal. |
6 | (b.1) Acknowledgment and affidavits.-- |
7 | (1) In addition to the requirements under subsection |
8 | (b): |
9 | (i) A power of attorney shall be acknowledged by the |
10 | principal as provided in this subsection. |
11 | (ii) The witnesses to a power of attorney shall |
12 | provide affidavits as provided in this subsection. A |
13 | witness may not be the individual who takes the |
14 | principal's acknowledgment. A separate affidavit may be |
15 | used for each witness whose affidavit is not taken at the |
16 | same time as the principal's acknowledgment. |
17 | (2) The acknowledgment of the principal and the |
18 | affidavits of the witnesses shall be: |
19 | (i) Made before: |
20 | (A) an officer authorized to administer oaths |
21 | under the laws of this Commonwealth or under the laws |
22 | of the state where execution occurs; or |
23 | (B) an attorney at law and certified to such an |
24 | officer as provided in paragraph (3). |
25 | (ii) Evidenced by the officer's certificate, under |
26 | official seal. |
27 | (iii) Attached or annexed to the power of attorney. |
28 | (iv) In substantially the same form and content as |
29 | follows: |
30 | Acknowledgment by Principal |
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1 | Commonwealth of Pennsylvania (or State of ) |
2 | County of |
3 | The principal whose name is signed to the attached or |
4 | foregoing instrument, having been duly qualified according to |
5 | law, did hereby acknowledge that he or she signed the instrument |
6 | as a power of attorney willingly and as a free and voluntary act |
7 | for the purposes therein expressed. |
8 | Sworn to or affirmed and acknowledged before me by , |
9 | the principal, this day of , 20 . |
10 | |
11 | (Signature of officer or attorney) |
12 | (Seal and official capacity of officer or |
13 | state of admission of attorney and Supreme Court |
14 | Identification No. ) |
15 | Affidavit by Witnesses |
16 | Commonwealth of Pennsylvania (or State of ) |
17 | County of |
18 | We (or I) and , the witness(es) |
19 | whose name(s) are (is) signed to the attached or foregoing |
20 | instrument, being duly qualified according to law, do depose and |
21 | say that we were (I was) present and saw the principal sign the |
22 | instrument as a power of attorney willingly and as a free and |
23 | voluntary act for the purposes therein expressed, that we (or I) |
24 | signed the power of attorney as witness(es) in the hearing and |
25 | sight of the principal, and that to the best of our (my) |
26 | knowledge the principal was at that time 18 or more years of |
27 | age, of sound mind and under no constraint or undue influence. |
28 | Sworn to or affirmed and subscribed before me by |
29 | and , witness(es), this day |
30 | of , 20 . |
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1 | |
2 | (Witness) |
3 | |
4 | (Witness) |
5 | |
6 | (Signature of officer or attorney) |
7 | (Seal and official capacity of officer or |
8 | state of admission of attorney and Supreme Court |
9 | Identification No. ) |
10 | (3) The acknowledgment of the principal and the |
11 | affidavit of a witness required by this subsection may be |
12 | made before a member of the bar of the Supreme Court of |
13 | Pennsylvania or of the highest court of the state in which |
14 | execution of the power of attorney occurs who certifies to an |
15 | officer authorized to administer oaths that the |
16 | acknowledgment and affidavits were made before that member of |
17 | the bar. In such case, in addition to the acknowledgment and |
18 | affidavits required by this subsection, the attorney's |
19 | certification shall be evidenced by the officer before whom |
20 | it was made substantially as follows: |
21 | Commonwealth of Pennsylvania (or State of ) |
22 | County of . |
23 | On this, the day of , 20 , before me , |
24 | the undersigned officer, personally appeared , |
25 | known to me or satisfactorily proven to be a member of the bar |
26 | of the highest court of (Pennsylvania or the state in which |
27 | execution of the power of attorney took place), and certified |
28 | that he or she was personally present when the foregoing |
29 | acknowledgment and affidavits were made by the principal and |
30 | witnesses. |
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1 | In witness whereof, I hereunto set my hand and official seal. |
2 | |
3 | (Signature, seal and official capacity of |
4 | officer) |
5 | * * * |
6 | (e.1) Limitation on applicability in commercial |
7 | transaction.-- |
8 | (1) Subsections (b), (b.1), (c), (d) and (e) do not |
9 | apply to a power or a power of attorney contained in an |
10 | instrument used in a commercial transaction which simply |
11 | authorizes an agency relationship. This paragraph includes |
12 | the following: |
13 | (i) A power given to or for the benefit of a |
14 | creditor in connection with a loan or other credit |
15 | transaction. |
16 | (ii) A power exclusively granted to facilitate |
17 | transfer of stock, bonds and other assets. |
18 | (iii) A power contained in the governing document |
19 | for a corporation, partnership or limited liability |
20 | company or other legal entity by which a director, |
21 | partner or member authorizes others to do other things on |
22 | behalf of the entity. |
23 | (iv) A warrant of attorney conferring authority to |
24 | confess judgment. |
25 | (v) A power given to a dealer as defined by the act |
26 | of December 22, 1983 (P.L.306, No.84), known as the Board |
27 | of Vehicles Act, when using the power in conjunction with |
28 | a sale, purchase or transfer of a vehicle as authorized |
29 | by 75 Pa.C.S. § 1119 (relating to application for |
30 | certificate of title by agent). |
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1 | (2) Powers and powers of attorney exempted by this |
2 | subsection need not be dated. |
3 | (e.2) Limitation on applicability in health care power of |
4 | attorney.--Subsections (b), (b.1), (c) and (d) do not apply to a |
5 | power of attorney which exclusively provides for health care |
6 | decision making. |
7 | * * * |
8 | § 5602. Form of power of attorney. |
9 | * * * |
10 | (c) Filing of power of attorney.--An originally executed |
11 | [copy of the] power of attorney may be filed with the clerk of |
12 | the orphans' court division of the court of common pleas in the |
13 | county in which the principal resides, and if it is |
14 | acknowledged, it may be recorded in the office for the recording |
15 | of deeds of the county of the principal's residence and of each |
16 | county in which real property to be affected by an exercise of |
17 | the power is located. The clerk of the orphans' court division |
18 | or any office for the recording of deeds with whom the power has |
19 | been filed, may, upon request, issue certified copies of the |
20 | power of attorney. Each such certified copy shall have the same |
21 | validity and the same force and effect as if it were the |
22 | original, and it may be filed of record in any other office of |
23 | this Commonwealth (including, without limitation, the clerk of |
24 | the orphans' court division or the office for the recording of |
25 | deeds) as if it were the original. |
26 | (d) Copy of power of attorney.--Except for the purpose of |
27 | filing under subsection (c), a photocopy or electronically |
28 | transmitted copy of an originally executed power of attorney has |
29 | the same effect as the original. |
30 | Section 2. Section 5608 of Title 20 is amended to read: |
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1 | § 5608. Liability. |
2 | (a) Third party liability.-- |
3 | (1) Any person who is given instructions by a person |
4 | claiming to be an agent [in accordance with the terms of a] |
5 | acting under a document appearing to be a valid power of |
6 | attorney shall comply with the instructions if the action |
7 | requested is authorized under the terms of the document. |
8 | (2) Any person who without reasonable cause fails to |
9 | comply with those instructions shall be subject to civil |
10 | liability for any damages resulting from noncompliance. |
11 | (3) Reasonable cause under this subsection shall |
12 | include, but not be limited to, [a] any of the following: |
13 | (i) A reasonable good faith belief that: |
14 | (A) the document presented is void, invalid or |
15 | terminated; |
16 | (B) the agent's apparent authority is void, |
17 | invalid or terminated; or |
18 | (C) the agent is exceeding or improperly |
19 | exercising the agent's apparent authority. |
20 | (ii) A good faith report having been made by the |
21 | [third party] person to whom instructions have been given |
22 | by the agent to the local protective services agency |
23 | regarding abuse, neglect, exploitation or abandonment |
24 | pursuant to section 302 of the act of November 6, 1987 |
25 | (P.L.381, No.79), known as the Older Adults Protective |
26 | Services Act, or section 302 of the act of October 7, |
27 | 2010 (P.L.484, No.70), known as the Adult Protective |
28 | Services Act. |
29 | (b) Third party immunity.--Any person who reasonably acts in |
30 | good faith reliance on a document appearing to be a valid power |
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1 | of attorney shall incur no liability as a result of acting in |
2 | accordance with the instructions of the person claiming to be an |
3 | agent. |
4 | Section 3. This act shall apply as follows: |
5 | (1) The amendment of 20 Pa.C.S. § 5601(b) and (b.1) |
6 | shall only apply to a power of attorney executed on or after |
7 | the effective date of this section. |
8 | (2) The amendment of 20 Pa.C.S. § 5608 shall apply to: |
9 | (i) A power of attorney executed before, on or after |
10 | the effective date of this section. |
11 | (ii) An action, by a third party or person to whom |
12 | instructions have been given by an agent, occurring |
13 | before, on or after the effective date of this section. |
14 | Section 4. This act shall take effect as follows: |
15 | (1) The amendment or addition of 20 Pa.C.S. § 5601(b), |
16 | (b.1), (e.1) and (e.2) shall take effect in six months. |
17 | (2) The amendment or addition of 20 Pa.C.S. §§ 5602(c) |
18 | and (d) and 5608 shall take effect immediately. |
19 | (3) This section shall take effect immediately. |
20 | Section 1. Section 5601(b), (c), (d), (e), (e.1)(1) | <-- |
21 | introductory paragraph and (f) of Title 20 of the Pennsylvania |
22 | Consolidated Statutes are amended to read: |
23 | § 5601. General provisions. |
24 | * * * |
25 | (b) Execution.-- |
26 | (1) A power of attorney shall be dated and it shall be |
27 | signed [and dated] by the principal by signature or mark, or |
28 | by another individual on behalf of and at the direction of |
29 | the principal. |
30 | (2) If the power of attorney is executed by mark or by |
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1 | another individual, then it shall be witnessed by two |
2 | individuals, each of whom is 18 years of age or older. A |
3 | witness shall not be the individual who signed the power of |
4 | attorney on behalf of and at the direction of the principal. |
5 | (3) For a power of attorney executed on or after January |
6 | 1, 2013, the signature of the principal, or other individual |
7 | signing a power of attorney on behalf of the principal, shall |
8 | be acknowledged before a notary public or other individual |
9 | authorized by law to take acknowledgments. |
10 | (c) Notice.--All powers of attorney shall include the |
11 | following notice in capital letters at the beginning of the |
12 | power of attorney. The notice shall be signed by the principal. |
13 | In the absence of a signed notice, upon a challenge to the |
14 | authority of an agent to exercise a power under the power of |
15 | attorney, the agent shall have the burden of demonstrating that |
16 | the exercise of this authority is proper. |
17 | NOTICE |
18 | The purpose of this power of attorney is to give the |
19 | person you designate (your "agent") broad powers to handle |
20 | your property, which may include powers to sell or otherwise |
21 | dispose of any real or personal property without advance |
22 | notice to you or approval by you. |
23 | This power of attorney does not impose a duty on your |
24 | agent to exercise granted powers, but when powers are |
25 | exercised, your agent must use due care to act for your |
26 | benefit and in accordance with this power of attorney. |
27 | Your agent may exercise the powers given here throughout |
28 | your lifetime, even after you become incapacitated, unless |
29 | you expressly limit the duration of these powers or you |
30 | revoke these powers or a court acting on your behalf |
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1 | terminates your agent's authority. |
2 | Your agent must [keep your funds separate from your |
3 | agent's funds] act in accordance with your reasonable |
4 | expectations to the extent actually known by your agent and, |
5 | otherwise, in your best interest, act in good faith and act |
6 | only within the scope of authority granted by you in the |
7 | power of attorney. |
8 | The law permits you, if you choose, to grant broad |
9 | authority to an agent under power of attorney, including the |
10 | ability to give away all of your property while you are alive |
11 | or to substantially change how your property is distributed |
12 | at your death. Before signing this document you should seek |
13 | the advice of an attorney at law to make sure you understand |
14 | it. |
15 | A court can take away the powers of your agent if it |
16 | finds your agent is not acting properly. |
17 | The powers and duties of an agent under a power of |
18 | attorney are explained more fully in 20 Pa.C.S. Ch. 56. |
19 | If there is anything about this form that you do not |
20 | understand, you should ask a lawyer of your own choosing to |
21 | explain it to you. |
22 | I have read or had explained to me this notice and I I |
23 | have read or had explained to me this notice and I understand |
24 | its contents. |
25 | |
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28 | (d) Acknowledgment executed by agent.--An agent shall have |
29 | no authority to act as agent under the power of attorney unless |
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1 | the agent has first executed and affixed to the power of |
2 | attorney an acknowledgment in substantially the following form: |
3 | I, | ,have read the attached power of |
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4 | attorney and am the person identified as the agent for |
5 | the principal. I hereby acknowledge that [in the absence |
6 | of a specific provision to the contrary in the power of |
7 | attorney or in 20 Pa.C.S.] when I act as agent: |
8 | I shall [exercise the powers for the benefit of the |
9 | principal] act in accordance with the principal's |
10 | reasonable expectations to the extent actually known by |
11 | me and, otherwise, in the principal's best interest, act |
12 | in good faith and act only within the scope of authority |
13 | granted to me by the principal in the power of attorney. |
14 | [I shall keep the assets of the principal separate |
15 | from my assets. |
16 | I shall exercise reasonable caution and prudence. |
17 | I shall keep a full and accurate record of all |
18 | actions, receipts and disbursements on behalf of the |
19 | principal.] |
20 | |
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23 | [(e) Fiduciary relationship.--An agent acting under a power |
24 | of attorney has a fiduciary relationship with the principal. In |
25 | the absence of a specific provision to the contrary in the power |
26 | of attorney, the fiduciary relationship includes the duty to: |
27 | (1) Exercise the powers for the benefit of the |
28 | principal. |
29 | (2) Keep separate the assets of the principal from those |
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1 | of an agent. |
2 | (3) Exercise reasonable caution and prudence. |
3 | (4) Keep a full and accurate record of all actions, |
4 | receipts and disbursements on behalf of the principal.] |
5 | (e.1) Limitation on applicability in commercial |
6 | transaction.-- |
7 | (1) Subsections [(c), (d) and (e)] (b)(2) and (3), (c) |
8 | and (d) and section 5601.3 (relating to agents' duties) do |
9 | not apply to a power or a power of attorney contained in an |
10 | instrument used in a commercial transaction which simply |
11 | authorizes an agency relationship. This paragraph includes |
12 | the following: |
13 | * * * |
14 | (f) [Definition.--As used in this chapter, the term "agent" |
15 | means a person designated by a principal in a power of attorney |
16 | to act on behalf of that principal.] Definitions.--The following |
17 | words and phrases when used in this chapter shall have the |
18 | meanings given to them in this subsection unless the context |
19 | clearly indicates otherwise: |
20 | "Agent." A person designated by a principal in a power of |
21 | attorney to act on behalf of that principal. |
22 | "Good faith." Honesty in fact. |
23 | Section 2. Section 5601.2 of Title 20 is repealed: |
24 | [§ 5601.2. Special rules for gifts. |
25 | (a) General rule.--A principal may empower an agent to make |
26 | a gift in a power of attorney only as provided in this section. |
27 | (b) Limited gifts.--A principal may authorize an agent to |
28 | make a limited gift as defined under section 5603(a)(2) |
29 | (relating to implementation of power of attorney) by the |
30 | inclusion of: |
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1 | (1) the language quoted in section 5602(a)(1) (relating |
2 | to form of power of attorney); or |
3 | (2) other language showing a similar intent on the part |
4 | of the principal to empower the agent to make a limited gift. |
5 | (c) Unlimited gifts.--A principal may authorize an agent to |
6 | make any other gift only by specifically providing for and |
7 | defining the agent's authority in the power of attorney. |
8 | (d) Nature of gifts.--In the absence of a specific provision |
9 | to the contrary in the power of attorney: |
10 | (1) A power to make a limited gift shall be construed to |
11 | empower the agent to make a gift to each donee either |
12 | outright or in trust. |
13 | (2) In the case of any gift to a minor, that gift may be |
14 | made in trust or in accordance with Chapter 53 (relating to |
15 | Pennsylvania Uniform Transfers to Minors Act) or section 5155 |
16 | (relating to order of court). |
17 | (3) In the case of any gift made in trust, the agent may |
18 | execute a deed of trust for such purpose, designating one or |
19 | more persons, including the agent, as original or successor |
20 | trustees, or may make an addition to an existing trust. |
21 | (4) In making any gift, the agent need not treat the |
22 | donees equally or proportionately and may entirely exclude |
23 | one or more permissible donees. |
24 | (5) The pattern followed on the occasion of any gift |
25 | need not be followed on the occasion of any other gift. |
26 | (e) Equity.--An agent and the donee of a gift shall be |
27 | liable as equity and justice may require to the extent that, as |
28 | determined by the court, a gift made by the agent is |
29 | inconsistent with prudent estate planning or financial |
30 | management for the principal or with the known or probable |
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1 | intent of the principal with respect to disposition of the |
2 | estate. |
3 | (f) Third party.--No transfer agent, depository or other |
4 | third party acting in good faith shall have any responsibility |
5 | to see to the proper discharge of the agent's duty.] |
6 | Section 3. Title 20 is amended by adding sections to read: |
7 | § 5601.3. Agent's duties. |
8 | (a) General rule.--Notwithstanding any provision in the |
9 | power of attorney, an agent that has accepted appointment shall: |
10 | (1) Act in accordance with the principal's reasonable |
11 | expectations to the extent actually known by the agent and, |
12 | otherwise, in the principal's best interest. |
13 | (2) Act in good faith. |
14 | (3) Act only within the scope of authority granted in |
15 | the power of attorney. |
16 | (b) Other duties.--Except as otherwise provided in the power |
17 | of attorney, an agent that has accepted appointment shall: |
18 | (1) Act loyally for the principal's benefit. |
19 | (2) Act so as not to create a conflict of interest that |
20 | impairs the agent's ability to act impartially in the |
21 | principal's best interest. |
22 | (3) Act with the care, competence and diligence |
23 | ordinarily exercised by agents in similar circumstances. |
24 | (4) Keep a record of all receipts, disbursements and |
25 | transactions made on behalf of the principal. |
26 | (5) Cooperate with a person who has authority to make |
27 | health-care decisions for the principal to carry out the |
28 | principal's reasonable expectations to the extent actually |
29 | known by the agent and, otherwise, act in the principal's |
30 | best interest. |
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1 | (6) Attempt to preserve the principal's estate plan, to |
2 | the extent actually known by the agent, if preserving the |
3 | plan is consistent with the principal's best interest based |
4 | on all relevant factors, including: |
5 | (i) The value and nature of the principal's |
6 | property. |
7 | (ii) The principal's foreseeable obligations and |
8 | need for maintenance. |
9 | (iii) Minimization of taxes, including income, |
10 | estate, inheritance, generation-skipping transfer and |
11 | gift taxes. |
12 | (iv) Eligibility for a benefit, program or |
13 | assistance under a statute or regulation. |
14 | (c) Nonliability of agent.-- |
15 | (1) An agent that acts in good faith shall not be liable |
16 | to a beneficiary of the principal's estate plan for failure |
17 | to preserve the plan. |
18 | (2) An agent that acts with care, competence and |
19 | diligence for the best interest of the principal shall not be |
20 | liable solely because the agent also benefits from the act or |
21 | has an individual or conflicting interest in relation to the |
22 | property or affairs of the principal. |
23 | (3) If an agent is selected by the principal because of |
24 | special skills or expertise possessed by the agent or in |
25 | reliance on the agent's representation that the agent has |
26 | special skills or expertise, the special skills or expertise |
27 | must be considered in determining whether the agent has acted |
28 | with care, competence and diligence under the circumstances. |
29 | (4) Absent a breach of duty to the principal, an agent |
30 | shall not be liable if the value of the principal's property |
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1 | declines. |
2 | (5) An agent that exercises authority to delegate to |
3 | another person the authority granted by the principal or that |
4 | engages another person on behalf of the principal shall not |
5 | be liable for an act, error of judgment or default of that |
6 | person if the agent exercises care, competence and diligence |
7 | in selecting and monitoring the person. |
8 | (d) Disclosure of receipts, disbursements or transactions.-- |
9 | (1) Except as otherwise provided in the power of |
10 | attorney, an agent shall not be required to disclose |
11 | receipts, disbursements or transactions conducted on behalf |
12 | of the principal unless ordered by a court or requested by |
13 | the principal, a guardian, conservator, another fiduciary |
14 | acting for the principal, governmental agency having |
15 | authority to protect the welfare of the principal or, upon |
16 | the death of the principal, the personal representative or |
17 | successor in interest of the principal's estate. |
18 | (2) Within 30 days of the request, the agent shall |
19 | either comply with the request or provide a writing or other |
20 | record substantiating the reason additional time is needed, |
21 | in which case the agent shall comply with the request within |
22 | an additional 30 days. |
23 | § 5601.4. Authority that requires specific and general grant of |
24 | authority. |
25 | (a) General rule.--An agent under a power of attorney may do |
26 | the following on behalf of the principal or with the principal's |
27 | property only if the power of attorney expressly grants the |
28 | agent the authority and exercise of the authority is not |
29 | otherwise prohibited by another agreement or instrument to which |
30 | the authority or property is subject: |
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1 | (1) Create, amend, revoke or terminate an inter vivos |
2 | trust other than as permitted under section 5602(a)(2), (3) |
3 | and (7) (relating to form of power of attorney). |
4 | (2) Make a gift. |
5 | (3) Create or change rights of survivorship. |
6 | (4) Create or change a beneficiary designation. |
7 | (5) Delegate authority granted under the power of |
8 | attorney. |
9 | (6) Waive the principal's right to be a beneficiary of a |
10 | joint and survivor annuity, including a survivor benefit |
11 | under a retirement plan. |
12 | (7) Exercise fiduciary powers that the principal has |
13 | authority to delegate. |
14 | (8) Disclaim property, including a power of appointment. |
15 | (b) Limitation.--Notwithstanding a grant of authority to do |
16 | an act described in subsection (a), unless the power of attorney |
17 | otherwise provides, an agent that is not an ancestor, spouse or |
18 | descendant of the principal may not exercise authority under a |
19 | power of attorney to create in the agent, or in an individual to |
20 | whom the agent owes a legal obligation of support, an interest |
21 | in the principal's property, whether by gift, right of |
22 | survivorship, beneficiary designation, disclaimer or otherwise. |
23 | (c) Scope of authority.--Subject to subsections (a), (b), |
24 | (d), and (e), if a power of attorney grants to an agent |
25 | authority to do all acts that a principal is authorized to |
26 | perform, the agent has the general authority described in |
27 | section 5602(a). |
28 | (d) Gifts.--Unless the power of attorney otherwise provides, |
29 | a grant of authority to make a gift is subject to section |
30 | 5603(a.1) (relating to implementation of power of attorney). |
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1 | (e) Similar or overlapping subjects.--Subject to subsections |
2 | (a), (b) and (d), if the subjects over which authority is |
3 | granted in a power of attorney are similar or overlap, the |
4 | broadest authority controls. |
5 | (f) Property.--Authority granted in a power of attorney is |
6 | exercisable with respect to property that the principal has when |
7 | the power of attorney is executed or acquires later, whether or |
8 | not the property is located in this State and whether or not the |
9 | authority is exercised or the power of attorney is executed in |
10 | this State. |
11 | (g) Legal effect of agent's actions.--An act performed by an |
12 | agent pursuant to a power of attorney has the same effect and |
13 | inures to the benefit of and binds the principal and the |
14 | principal's successors in interest as if the principal had |
15 | performed the act. |
16 | Section 4. Section 5602(a)(5) and (17) of Title 20 are |
17 | amended to read: |
18 | § 5602. Form of power of attorney. |
19 | (a) Specification of powers.--A principal may, by inclusion |
20 | of the language quoted in any of the following paragraphs or by |
21 | inclusion of other language showing a similar intent on the part |
22 | of the principal, empower an agent to do any or all of the |
23 | following, each of which is defined in section 5603 (relating to |
24 | implementation of power of attorney): |
25 | * * * |
26 | [(5) "To disclaim any interest in property."] |
27 | * * * |
28 | (17) "To engage in insurance and annuity transactions." |
29 | * * * |
30 | Section 5. Section 5603(a), (e), (p) and (q) of Title 20 are |
|
1 | amended and the section is amended by adding a subsection to |
2 | read: |
3 | § 5603. Implementation of power of attorney. |
4 | [(a) Power to make limited gifts.-- |
5 | (2) A power "to make limited gifts" shall mean that the |
6 | agent may make only gifts for or on behalf of the principal |
7 | which are limited as follows: |
8 | (i) The class of permissible donees under this |
9 | paragraph shall consist solely of the principal's spouse, |
10 | issue and a spouse of the principal's issue (including |
11 | the agent if a member of any such class), or any of them. |
12 | (ii) During each calendar year, the gifts made to |
13 | any permissible donee, pursuant to such power, shall have |
14 | an aggregate value not in excess of, and shall be made in |
15 | such manner as to qualify in their entirety for, the |
16 | annual exclusion from the Federal gift tax permitted |
17 | under section 2503(b) of the Internal Revenue Code of |
18 | 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.) for the |
19 | principal and, if applicable, the principal's spouse. |
20 | (iv) In addition to the gifts authorized by |
21 | subparagraphs (i) and (ii), a gift made pursuant to such |
22 | power may be for the tuition or medical care of any |
23 | permissible donee to the extent that the gift is excluded |
24 | from the Federal gift tax under section 2503(e) of the |
25 | Internal Revenue Code of 1986 as a qualified transfer. |
26 | (v) The agent may consent, pursuant to section |
27 | 2513(a) of the Internal Revenue Code of 1986, to the |
28 | splitting of gifts made by the principal's spouse to the |
29 | principal's issue or a spouse of the principal's issue in |
30 | any amount and to the splitting of gifts made by the |
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1 | principal's spouse to any other person in amounts not |
2 | exceeding the aggregate annual gift tax exclusions for |
3 | both spouses under section 2503(b) of the Internal |
4 | Revenue Code of 1986.] |
5 | (a.1) Power to make limited gifts.-- |
6 | (1) Unless the power of attorney otherwise provides, |
7 | language in a power of attorney granting general authority |
8 | with respect to gifts authorizes the agent only to: |
9 | (i) Make outright to or for the benefit of a person, |
10 | a gift of any of the principal's property, including by |
11 | the exercise of a presently exercisable general power of |
12 | appointment held by the principal: |
13 | (A) in an amount per donee not to exceed the |
14 | annual dollar limits of the Federal gift tax |
15 | exclusion under section 2503(b) of the Internal |
16 | Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § |
17 | 2503(b)), without regard to whether the Federal gift |
18 | tax exclusion applies to the gift; or |
19 | (B) if the principal's spouse agrees to consent |
20 | to a split gift pursuant to section 2513 of the |
21 | Internal Revenue Code of 1986, in an amount per donee |
22 | not to exceed twice the annual Federal gift tax |
23 | exclusion limit. |
24 | (ii) Consent, pursuant to section 2513 of the |
25 | Internal Revenue Code of 1986, to the splitting of a gift |
26 | made by the principal's spouse in an amount per donee not |
27 | to exceed the aggregate annual gift tax exclusions for |
28 | both spouses. |
29 | (2) An agent may make a gift of the principal's property |
30 | only as the agent determines is consistent with the |
|
1 | principal's objectives if actually known by the agent and, if |
2 | unknown, as the agent determines is consistent with the |
3 | principal's best interest based on all relevant factors, |
4 | including: |
5 | (i) The value and nature of the principal's |
6 | property. |
7 | (ii) The principal's foreseeable obligations and |
8 | need for maintenance. |
9 | (iii) Minimization of taxes, including income, |
10 | estate, inheritance, generation-skipping transfer and |
11 | gift taxes. |
12 | (iv) Eligibility for a benefit, program or |
13 | assistance under a statute or regulation. |
14 | (v) The principal's personal history of making or |
15 | joining in making gifts. |
16 | (3) As used in this subsection, the phrase "a gift for |
17 | the benefit of a person" includes a gift to a trust, an |
18 | account under Chapter 53 (relating to Pennsylvania Uniform |
19 | Transfers to Minors Act) and a tuition savings account or |
20 | prepaid tuition plan as defined under section 529 of the |
21 | Internal Revenue Code of 1986. |
22 | * * * |
23 | [(e) Power to disclaim any interest in property.--A power |
24 | "to disclaim any interest in property" shall mean that the agent |
25 | may release or disclaim any interest in property on behalf of |
26 | the principal in accordance with Chapter 62 (relating to |
27 | disclaimers) or section 6103 (relating to release or disclaimer |
28 | of powers or interests), provided that any disclaimer under |
29 | Chapter 62 shall be in accordance with the provisions of section |
30 | 6202 (relating to disclaimers by fiduciaries or agents) in the |
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1 | case of a principal who shall have been adjudicated an |
2 | incapacitated person at the time of the execution of the |
3 | disclaimer.] |
4 | * * * |
5 | (p) Power to engage in insurance and annuity transactions.-- |
6 | A power to "engage in insurance and annuity transactions" shall |
7 | mean that the agent may: |
8 | (1) Purchase, continue, renew, convert or terminate any |
9 | type of insurance (including, but not limited to, life, |
10 | accident, health, disability or liability insurance) or |
11 | annuity and pay premiums and collect benefits and proceeds |
12 | under insurance policies and annuity contracts. |
13 | (2) Exercise nonforfeiture provisions under insurance |
14 | policies and annuity contracts. |
15 | (3) In general, exercise all powers with respect to |
16 | insurance and annuities that the principal could if present; |
17 | [however, the agent cannot designate himself beneficiary of a |
18 | life insurance policy unless the agent is the spouse, child, |
19 | grandchild, parent, brother or sister of the principal. An |
20 | agent and a beneficiary of a life insurance policy shall be |
21 | liable as equity and justice may require to the extent that, |
22 | as determined by the court, a beneficiary designation made by |
23 | the agent is inconsistent with the known or probable intent |
24 | of the principal] provided, however, that the agent shall |
25 | have no power to create or change a beneficiary designation |
26 | unless authorized in accordance with section 5601.4 (relating |
27 | to authority that requires specific and general grant of |
28 | authority). |
29 | (q) Power to engage in retirement plan transactions.--A |
30 | power to "engage in retirement plan transactions" shall mean |
|
1 | that the agent may contribute to, withdraw from and deposit |
2 | funds in any type of retirement plan (including, but not limited |
3 | to, any tax qualified or nonqualified pension, profit sharing, |
4 | stock bonus, employee savings and retirement plan, deferred |
5 | compensation plan or individual retirement account), select and |
6 | change payment options for the principal, make roll-over |
7 | contributions from any retirement plan to other retirement plans |
8 | and, in general, exercise all powers with respect to retirement |
9 | plans that the principal could if present[. However, the agent |
10 | cannot designate himself beneficiary of a retirement plan unless |
11 | the agent is the spouse, child, grandchild, parent, brother or |
12 | sister of the principal. An agent and a beneficiary of a |
13 | retirement plan shall be liable as equity and justice may |
14 | require to the extent that, as determined by the court, a |
15 | beneficiary designation made by the agent is inconsistent with |
16 | the known or probable intent of the principal] provided, |
17 | however, that the agent shall have no power to create or change |
18 | a beneficiary designation unless authorized in accordance with |
19 | section 5601.4. |
20 | * * * |
21 | Section 6. Section 5608 of Title 20 is amended to read: |
22 | § 5608. [Liability] Acceptance of and reliance upon power of |
23 | attorney. |
24 | [(a) Third party liability.--Any person who is given |
25 | instructions by an agent in accordance with the terms of a power |
26 | of attorney shall comply with the instructions. Any person who |
27 | without reasonable cause fails to comply with those instructions |
28 | shall be subject to civil liability for any damages resulting |
29 | from noncompliance. Reasonable cause under this subsection shall |
30 | include, but not be limited to, a good faith report having been |
|
1 | made by the third party to the local protective services agency |
2 | regarding abuse, neglect, exploitation or abandonment pursuant |
3 | to section 302 of the act of November 6, 1987 (P.L.381, No.79), |
4 | known as the Older Adults Protective Services Act. |
5 | (b) Third party immunity.--Any person who acts in good faith |
6 | reliance on a power of attorney shall incur no liability as a |
7 | result of acting in accordance with the instructions of the |
8 | agent.] |
9 | (c) Genuineness.--A person who in good faith accepts a power |
10 | of attorney without actual knowledge that a signature or mark of |
11 | any of the following are not genuine may, without liability, |
12 | rely upon the genuineness of the signature or mark of: |
13 | (1) The principal. |
14 | (2) A person directed by the principal on the |
15 | principal's behalf and in the principal's conscious presence |
16 | to sign the power of attorney. |
17 | (3) A witness. |
18 | (4) A notary public or other person authorized by law to |
19 | take acknowledgments. |
20 | (d) Immunity.--A person who in good faith accepts a power of |
21 | attorney without actual knowledge of any of the following may, |
22 | without liability, rely upon the power of attorney as if the |
23 | power of attorney and agent's authority were genuine, valid and |
24 | still in effect and the agent had not exceeded and had properly |
25 | exercised the authority that: |
26 | (1) The power of attorney is void, invalid or |
27 | terminated. |
28 | (2) The purported agent's authority is void, invalid or |
29 | terminated. |
30 | (3) The agent is exceeding or improperly exercising the |
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1 | agent's authority. |
2 | (e) Request for information.--A person who is asked to |
3 | accept a power of attorney may request and, without liability, |
4 | rely upon without further investigation: |
5 | (1) An agent's certification under penalty of perjury of |
6 | any factual matter concerning the principal, agent or power |
7 | of attorney or an affidavit under section 5606 (relating to |
8 | proof of continuance of powers of attorney by affidavit). |
9 | (2) An English translation of the power of attorney, if |
10 | the power of attorney contains, in whole or in part, language |
11 | other than English. |
12 | (3) An opinion of counsel relating to whether the agent |
13 | is acting within the scope of the authority granted by the |
14 | power of attorney, if the person making the request provides |
15 | in a writing or other record the reason for the request. |
16 | (f) Additional request for information.--A person who has |
17 | accepted a power of attorney, whether or not the person has a |
18 | certification or opinion of counsel under subsection (e) or an |
19 | affidavit under section 5606, and has acted upon it by allowing |
20 | the agent to exercise authority granted under the power of |
21 | attorney, shall not be precluded from requesting at later times |
22 | a certification or opinion of counsel under this subsection, |
23 | subsection (e) or an affidavit under section 5606 with regard to |
24 | any further exercise of authority by the agent under the power |
25 | of attorney. |
26 | (g) English translation.--An English translation or an |
27 | opinion of counsel requested under this section shall be at the |
28 | principal's expense, unless the request is made more than seven |
29 | business days after the power of attorney is presented for |
30 | acceptance. |
|
1 | (h) Activities through employees.-- |
2 | (1) For purposes of this section, a person who conducts |
3 | activities through employees shall be considered to be |
4 | without actual knowledge of a fact relating to a power of |
5 | attorney, a principal or an agent, if the employee conducting |
6 | the transaction involving the power of attorney is without |
7 | knowledge of the fact. |
8 | (2) An employee has knowledge of a fact if the employee |
9 | has actual knowledge of the fact or acts with conscious |
10 | disregard or willful ignorance regarding the existence of the |
11 | fact. |
12 | (i) Limitations.--Except as otherwise provided by law, |
13 | nothing in this section shall in itself: |
14 | (1) validate a forged instrument conveying an interest |
15 | in real property; |
16 | (2) provide that the recording of a forged instrument |
17 | gives constructive notice of a conveyance of an interest in |
18 | real property; or |
19 | (3) limit the liability of insurer, indemnitor or |
20 | guarantor of contractual obligations to indemnify, hold |
21 | harmless or defend a person who accepts or relies upon a |
22 | power of attorney. |
23 | Section 7. Title 20 is amended by adding a section to read: |
24 | § 5608.1. Liability for refusal to accept acknowledged power of |
25 | attorney. |
26 | (a) Acceptance required.--Except as provided under |
27 | subsections (b) and (d): |
28 | (1) A person shall either: |
29 | (i) accept a power of attorney; or |
30 | (ii) request one of the following: |
|
1 | (A) affidavit under section 5606 (relating to |
2 | proof of continuance of powers of attorney by |
3 | affidavit); or |
4 | (B) a certification, translation or an opinion |
5 | of counsel under section 5608(e) (relating to |
6 | acceptance of and reliance upon power of attorney); |
7 | not later than seven business days after presentation of the |
8 | power of attorney for acceptance. |
9 | (2) If a person requests a certification, a translation, |
10 | an affidavit under section 5606 or an opinion of counsel |
11 | under section 5608(e), the person shall accept the power of |
12 | attorney not later than five business days after receipt of |
13 | the certification, translation, affidavit or opinion of |
14 | counsel or, unless the information provided by the |
15 | certification, translation, affidavit or opinion of counsel |
16 | provides a substantial basis for making a further request |
17 | under section 5606 or 5608(e). |
18 | (3) A person may not require an additional or different |
19 | form of power of attorney for authority granted in the power |
20 | of attorney presented. |
21 | (b) Acceptance not required.--A person may not be required |
22 | to accept an acknowledged power of attorney, if any of the |
23 | following applies: |
24 | (1) The person is not otherwise required to engage in a |
25 | transaction with the principal in the same circumstances. |
26 | (2) Engaging in a transaction with the agent or the |
27 | principal in the same circumstances would be inconsistent |
28 | with any provisions of this chapter, including: |
29 | (i) the failure of the power of attorney to be |
30 | executed in the manner required under section 5601(b) |
|
1 | (relating to general provisions); and |
2 | (ii) circumstances in which an agent has no |
3 | authority to act because of the absence of an |
4 | acknowledgment as provided under section 5601(d), except |
5 | as provided under section 5601(e.1) or (e.2). |
6 | (3) Engaging in a transaction with the agent in the same |
7 | circumstances would be inconsistent with any other law or |
8 | regulation. |
9 | (4) The person has actual knowledge of the termination |
10 | of the agent's authority or of the power of attorney before |
11 | exercise of the power. |
12 | (5) A request for a certification, a translation, an |
13 | affidavit under section 5606 or an opinion of counsel under |
14 | section 5608(e) is refused, including a certification, an |
15 | affidavit or an opinion of counsel requested to demonstrate |
16 | that the exercise of authority pursuant to a power of |
17 | attorney is proper without the notice provided for under |
18 | section 5601(c), except as provided under section 5601(e.1) |
19 | or (e.2). |
20 | (6) The person in good faith believes that the power of |
21 | attorney is not valid or the agent does not have the |
22 | authority to perform the act requested, whether or not a |
23 | certification, a translation, an affidavit under section 5606 |
24 | or opinion of counsel under section 5608(e) has been |
25 | requested or provided. |
26 | (7) The person makes a report to the local protective |
27 | services agency under section 302 of the act of November 6, |
28 | 1987 (P.L.381, No.79), known as the Older Adults Protective |
29 | Services Act, stating a good faith belief that the principal |
30 | may be subject to physical or financial abuse, neglect, |
|
1 | exploitation or abandonment by the agent or someone acting |
2 | for or with the agent. |
3 | (8) The person has actual knowledge that another person |
4 | has made a report to the local protective services agency |
5 | under section 302 of the Older Adults Protective Services |
6 | Act, stating a good faith belief that the principal may be |
7 | subject to physical or financial abuse, neglect, exploitation |
8 | or abandonment by the agent or someone acting for or with the |
9 | agent. |
10 | (c) Violation.--A person who refuses, in violation of this |
11 | section, to accept a power of attorney shall be subject to civil |
12 | liability for pecuniary harm to the economic interests of the |
13 | principal proximately caused by the person's refusal to comply |
14 | with the instructions of the agent designated in the power of |
15 | attorney. |
16 | (d) Nonapplicability.--The requirements of this section |
17 | shall not apply to: |
18 | (1) a power of attorney subject to the laws of another |
19 | state or jurisdiction; or |
20 | (2) a power of attorney prescribed by a government or |
21 | governmental subdivision, agency or instrumentality for a |
22 | governmental purpose. |
23 | (e) Activities through employees.-- |
24 | (1) For purposes of this section, a person who conducts |
25 | activities through employees shall be considered to be |
26 | without actual knowledge of a fact relating to a power of |
27 | attorney, a principal or an agent, if the employee conducting |
28 | the transaction involving the power of attorney is without |
29 | knowledge of the fact. |
30 | (2) An employee has knowledge of a fact if the employee |
|
1 | has actual knowledge of the fact or acts with conscious |
2 | disregard or willful ignorance regarding the existence of the |
3 | fact. |
4 | Section 8. Section 5611 of Title 20 is amended to read: |
5 | § 5611. Validity. |
6 | A power of attorney executed in [another state or |
7 | jurisdiction and in conformity with the laws of that state or |
8 | jurisdiction shall be considered valid in this Commonwealth, |
9 | except to the extent that the power of attorney executed in |
10 | another state or jurisdiction would allow an agent to make a |
11 | decision inconsistent with the laws of this Commonwealth.] or |
12 | under the laws of another state or jurisdiction shall be valid |
13 | in this Commonwealth if, when the power of attorney was |
14 | executed, the execution complied with: |
15 | (1) the law of the jurisdiction indicated in the power |
16 | of attorney and, in the absence of an indication of |
17 | jurisdiction, the law of the jurisdiction in which the power |
18 | of attorney was executed; or |
19 | (2) the requirements for a military power of attorney |
20 | under 10 U.S.C. § 1044(b) (relating to legal assistance). |
21 | Section 9. Title 20 is amended by adding a section read: |
22 | § 5612. Principles of law and equity. |
23 | Unless displaced by a provision of this chapter, the |
24 | principles of law and equity supplement this chapter. |
25 | Section 10. The following shall apply: |
26 | (1) The amendment or addition of 20 Pa.C.S. §§ 5601(f), |
27 | 5608, 5608.1 and 5611 shall apply to a power of attorney |
28 | executed at any time. |
29 | (2) The amendment of 20 Pa.C.S. §§ 5601(f) and 5608 |
30 | shall apply retroactively to acts performed after December |
|
1 | 15, 1992. |
2 | (3) In interpreting and applying the amendment or |
3 | addition of 20 Pa.C.S. §§ 5601(f), 5608, 5608.1 and 5611, a |
4 | court shall give due consideration of the intent of the |
5 | General Assembly to reverse the interpretation of 20 Pa.C.S. |
6 | § 5608 as set forth in Teresa M. Vine, v. Commonwealth of |
7 | Pennsylvania, State Employees' Retirement Board, 9 A.3d |
8 | 1150(Pa. 2010). |
9 | Section 11. This act shall take effect in 60 days. |
|