THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY M. K. KELLER, MARSICO, CALTAGIRONE, AUMENT, BENNINGHOFF, BOYD, BRENNAN, BUXTON, CARROLL, CLYMER, EVERETT, GEIST, GODSHALL, GRELL, HANNA, HARKINS, HARRIS, HELM, KAMPF, KAUFFMAN, KRIEGER, LAWRENCE, LONGIETTI, MANN, METCALFE, MILLARD, MILLER, MOUL, MURT, MUSTIO, OBERLANDER, O'NEILL, PICKETT, PRESTON, PYLE, QUINN, READSHAW, SAYLOR, SCHRODER, SONNEY, STERN, STURLA, TALLMAN, TOEPEL, TOOHIL, TURZAI, WATSON, BARBIN, P. COSTA, MAHER, CAUSER, MARSHALL, HICKERNELL, EVANKOVICH, REED, STEVENSON, VULAKOVICH, FARRY, HESS, CULVER, BLOOM, HORNAMAN AND GILLESPIE, OCTOBER 19, 2011

AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES, DECEMBER 6, 2011   

AN ACT

Amending Title 20 (Decedents, Estates and Fiduciaries) of the

Pennsylvania Consolidated Statutes, further providing for

general provisions, for special rules for gifts and for

liability; providing for liability for refusal to accept

acknowledged power of attorney; and further providing for

validity.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 5601(e) and (f) of Title 20 of the

Pennsylvania Consolidated Statutes are amended to read:

§ 5601.  General provisions.

* * *

(e)  Fiduciary relationship.--An agent acting under a power

of attorney has a fiduciary relationship with the principal. The

follow shall apply:

(1)  In the absence of a specific provision to the

contrary in the power of attorney, the fiduciary relationship

includes the duty to:

[(1)] (i)  Exercise the powers for the benefit of the

principal.

[(2)] (ii)  Keep separate the assets of the principal

from those of an agent.

[(3)] (iii)  Exercise reasonable caution and

prudence.

[(4)] (iv)  Keep a full and accurate record of all

actions, receipts and disbursements on behalf of the

principal.

(v)  Attempt to preserve the principal's estate plan,

to the extent actually known by the agent, if preserving

the plan is consistent with the principal's best interest

based on all relevant factors, including all of the

following:

(A)  The value and nature of the principal's

property.

(B)  The principal's foreseeable obligations and

need for maintenance.

(C)  Minimization of taxes, including income,

estate, inheritance, generation-skipping transfer and

gift taxes.

(D)  Eligibility for a benefit, a program or

assistance under a statute or regulation.

(2)  An agent that acts in good faith shall not be liable

to any beneficiary of the principal's estate plan for failure

to preserve the plan.

(3)  An agent that acts with care, competence and

diligence for the best interest of the principal shall not be

liable solely because the agent also benefits from the act or

has an individual or conflicting interest in relation to the

property or affairs of the principal.

(4)  If an agent is selected by the principal because of

special skills or expertise possessed by the agent or in

reliance on the agent's representation that the agent has

special skills or expertise, the special skills or expertise

must be considered in determining whether the agent has acted

with care, competence and diligence under the circumstances.

(5)  Absent a breach of duty to the principal, an agent

shall not be liable if the value of the principal's property

declines.

(6)  An agent that exercises authority to delegate to

another person the authority granted by the principal or that

engages another person on behalf of the principal shall not

be liable for an act, error of judgment or default of that

person if the agent exercises care, competence and diligence

in selecting and monitoring the person.

* * *

(f)  [Definition.--As used in this chapter, the term "agent"

means a person designated by a principal in a power of attorney

to act on behalf of that principal.] Definitions.--The following

words and phrases when used in this section shall have the

meanings given to them in this subsection unless the context

clearly indicates otherwise:

"Agent."  A person designated by a principal in a power of

attorney to act on behalf of that principal.

"Good faith."  Honesty in fact.

Section 1.1.  Section 5601.2(a) and (d)(1) of Title 20 are

amended and the section is amended by adding a subsection to

read:

§ 5601.2.  Special rules for gifts.

(a)  General rule.--A principal may empower an agent to make

a gift in a power of attorney only as provided in this section.

Unless the power of attorney otherwise provides, language in a

power of attorney granting general authority with respect to

gifts shall authorize the agent only to make limited gifts as

provided under section 5603(a)(2) (relating to implementation of

power of attorney).

* * *

(c.1)  Agent's discretion regarding gifts.--Unless the power

of attorney otherwise provides, an agent may make a gift of the

principal's property only as the agent determines is consistent

with the principal's objectives if actually known by the agent

and, if unknown, as the agent determines is consistent with the

principal's best interest based on all relevant factors,

including:

(1)  The value and nature of the principal's property.

(2)  The principal's foreseeable obligations and need for

maintenance.

(3)  Minimization of taxes, including income, estate,

inheritance, generation-skipping transfer and gift taxes.

(4)  Eligibility for a benefit, program or assistance

under a statute or regulation.

(5)  The principal's personal history of making or

joining in making gifts.

(d)  Nature of gifts.--In the absence of a specific provision

to the contrary in the power of attorney:

(1)  A power to make a limited gift shall be construed to

empower the agent to make a gift to each donee either

outright or in trust or to a tuition savings account or

prepaid tuition plan as defined in section 529 of the

Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §

529).

* * *

Section 1.2.  Section 5608 of Title 20 is amended to read:

§ 5608.  [Liability.] Acceptance of and reliance upon power of

attorney.

[(a)  Third party liability.--Any person who is given

instructions by an agent in accordance with the terms of a power

of attorney shall comply with the instructions. Any person who

without reasonable cause fails to comply with those instructions

shall be subject to civil liability for any damages resulting

from noncompliance. Reasonable cause under this subsection shall

include, but not be limited to, a good faith report having been

made by the third party to the local protective services agency

regarding abuse, neglect, exploitation or abandonment pursuant

to section 302 of the act of November 6, 1987 (P.L.381, No.79),

known as the Older Adults Protective Services Act.

(b)  Third party immunity.--Any person who acts in good faith

reliance on a power of attorney shall incur no liability as a

result of acting in accordance with the instructions of the

agent.]

(c)  Genuineness.--A person that in good faith accepts

instructions pursuant to an acknowledged power of attorney

without actual knowledge that a signature or mark of any of the

following are not genuine may, without liability, rely upon the

genuineness of the signature or mark:

(1)  The principal.

(2)  A person directed by the principal on his or her

behalf in the principal's conscious presence to sign the

power of attorney.

(3)  A witness.

(d)  Immunity.--A person that in good faith accepts a power

of attorney without actual knowledge of any of the following

may, without liability, rely upon the power of attorney as if

the power of attorney were genuine, valid and still in effect,

the agent's authority were genuine, valid and still in effect

and the agent had not exceeded and had properly exercised the

authority:

(1)  That the power of attorney is void, invalid or

terminated.

(2)  That the purported agent's authority is void,

invalid or terminated.

(3)  That the agent is exceeding or improperly exercising

the agent's authority.

(e)  Request for information.--A person that is asked to

accept a power of attorney may request and, without liability,

rely upon, without further investigation:

(1)  An agent's certification under penalty of perjury of

any factual matter concerning the principal, agent or power

of attorney or an affidavit under section 5606 (relating to

proof of continuance of powers of attorney by affidavit).

(2)  An English translation of the power of attorney if

the power of attorney contains, in whole or in part, language

other than English.

(3)  An opinion of counsel as to any matter of law

concerning the power of attorney if the person making the

request provides in a writing or other record the reason for

the request.

(f)  Additional request for information.--A person that has

accepted a power of attorney, whether with or without a

certification or opinion of counsel under subsection (e) or an

affidavit under section 5606, and has acted upon it by allowing

the agent to exercise authority granted under the power of

attorney, shall not be precluded from requesting at later times

a certification or opinion of counsel under this subsection,

subsection (e) or an affidavit under section 5606 with regard to

any further exercise of authority by the agent under the power

of attorney.

(g)  English translation.--An English translation or an

opinion of counsel requested under this section must be provided

at the principal's expense unless the request is made more than

seven business days after the power of attorney is presented for

acceptance.

(h)  Activities through employees.--For purposes of this

section, a person that conducts activities through employees

shall be considered to be without actual knowledge of a fact

relating to a power of attorney, a principal or an agent if the

employee conducting the transaction involving the power of

attorney is without actual knowledge of the fact.

(i)  Definition.--As used in this section, the term

"acknowledged power of attorney" means a power of attorney

containing signatures or marks purportedly verified before a

notary public or other individual authorized to take

acknowledgments.

Section 2.  Title 20 is amended by adding a section to read:

§ 5608.1.  Liability for refusal to accept acknowledged power of

attorney.

(a)  Acceptance required.--Except as provided under

subsections (b) and (d):

(1)  A person shall either accept an acknowledged power

of attorney or request a certification, a translation or an

opinion of counsel under section 5608(e) (relating to

acceptance of and reliance upon power of attorney) or an

affidavit under section 5606 (relating to proof of

continuance of powers of attorney by affidavit) no later than

seven business days after presentation of the power of

attorney for acceptance.

(2)  If a person requests a certification, a translation,

an opinion of counsel under section 5608(e) or an affidavit

under section 5606, the person shall accept the power of

attorney no later than five business days after receipt of

the certification, translation, opinion of counsel or

affidavit, unless the information provided by the

certification, translation, opinion or counsel or affidavit

provides a substantial basis for making a further request

under section 5606 or 5608(e).

(3)  A Except as provided under subsection (d)(2), a 

<--

person may not require an additional or different form of

power of attorney for authority granted in the power of

attorney presented.

(b)  Acceptance not required.--A person may not be required

to accept an acknowledged power of attorney if any of the

following applies:

(1)  The person is not otherwise required to engage in a

transaction with the principal in the same circumstances.

(2)  Engaging in a transaction with the agent or the

principal in the same circumstances would be inconsistent

with any provisions of this chapter, including:

(i)  the failure of a power of attorney to be

executed in the manner required under section 5601(b)

(relating to general provisions); and

(ii)  circumstances in which an agent has no

authority to act because of the absence of an

acknowledgment as provided under section 5601(d), except

as provided under section 5601(e.1) or (e.2).

(3)  Engaging in a transaction with the agent in the same

circumstances would be inconsistent with any other law or

regulation.

(4)  The person has actual knowledge of the termination

of the agent's authority or of the power of attorney before

exercise of the power.

(5)  A request for a certification, a translation, an

opinion of counsel under section 5608(e) or an affidavit

under section 5606 is refused, including a certification, an

opinion of counsel or an affidavit requested to demonstrate

that the exercise of authority pursuant to a power of

attorney is proper without the notice provided for under

section 5601(c), except as provided under section 5601(e.1)

or (e.2).

(6)  The person in good faith believes that the power of

attorney is not valid or that the agent does not have the

authority to perform the act requested, whether or not a

certification, a translation, an opinion of counsel under

section 5608(e) or an affidavit under section 5606 has been

requested or provided.

(7)  The person makes a report to the local protective

services agency under section 302 of the act of November 6,

1987 (P.L.381, No.79), known as the Older Adults Protective

Services Act, stating a good faith belief that a principal

may be subject to physical or financial abuse, neglect,

exploitation or abandonment by the agent or someone acting

for or with the agent.

(8)  The person has actual knowledge that another person

has made a report to the local protective services agency

regarding abuse, neglect, exploitation or abandonment under

section 302 of the Older Adults Protective Services Act.

(c)  Violation.--A person that refuses, in violation of this

section, to accept an acknowledged power of attorney may be

subject to all of the following:

(1)  A court order mandating acceptance of the power of

attorney.

(2)  Liability for reasonable attorney fees and costs

incurred in any action or proceeding that confirms the

validity of the power of attorney or mandates acceptance of

the power of attorney.

(d)  Applicability.--The requirements of this section shall

not apply to a power of attorney subject to the laws of another

<--

state or jurisdiction. any of the following:

<--

(1)  A power of attorney subject to the laws of another

state or jurisdiction.

(2)  A power of attorney prescribed by a government or

governmental subdivision, agency or instrumentality for a

governmental purpose.

(e)  Activities through employees.--For purposes of this

section, a person that conducts activities through employees

shall be considered to be without actual knowledge of a fact

relating to a power of attorney, a principal or an agent if the

employee conducting the transaction involving the power of

attorney is without actual knowledge of the fact.

(f)  Definition.--As used in this section, the term

"acknowledged power of attorney" shall mean a power of attorney

containing signatures or marks purportedly verified before a

notary public or other individual authorized to take

acknowledgments.

Section 3.  Section 5611 of Title 20 is amended to read:

§ 5611.  Validity.

[A power of attorney executed in another state or

jurisdiction and in conformity with the laws of that state or

jurisdiction shall be considered valid in this Commonwealth,

except to the extent that the power of attorney executed in

another state or jurisdiction would allow an agent to make a

decision inconsistent with the laws of this Commonwealth.]

A power of attorney executed in or under the laws of another

state or jurisdiction shall be valid in this Commonwealth if,

when the power of attorney was executed, the execution complied

with:

(1)  the law of the jurisdiction indicated in the power

of attorney and, in the absence of an indication of

jurisdiction, the law of the jurisdiction in which the power

of attorney was executed; or

(2)  the requirements for a military power of attorney

under 10 U.S.C. § 1044(b) (relating to legal assistance).

Section 4.  The following shall apply:

(1)  The amendment or addition of 20 Pa.C.S. §§ 5601(f),

5608, 5608.1 and 5611 shall apply to a power of attorney

executed at any time.

(2)  The amendment of 20 Pa.C.S. §§ 5601(f) and 5608

shall apply retroactively to acts performed after December

15, 1992.

(3)  In interpreting and applying the amendment or

addition of 20 Pa.C.S. §§ 5601(f), 5608, 5608.1 and 5611, a

court shall give due consideration of the intent of the

General Assembly to reverse the interpretation of 20 Pa.C.S.

§ 5608 as set forth in Teresa M. Vine, v. Commonwealth of

Pennsylvania, State Employees' Retirement Board, 9 A.3d

1150(Pa. 2010).

Section 5.  This act shall take effect immediately.