PRIOR PRINTER'S NOS. 1902, 2006
PRINTER'S NO. 3708
THE GENERAL ASSEMBLY OF PENNSYLVANIA
INTRODUCED BY M. K. KELLER, GRELL, AUMENT, BLOOM, CALTAGIRONE, CLYMER, CUTLER, DENLINGER, EVERETT, FLECK, GODSHALL, HESS, KNOWLES, LONGIETTI, MATZIE, METCALFE, MILLARD, R. MILLER, PICKETT, ROCK, SAYLOR, TURZAI, WATSON, GILLESPIE, GIBBONS, CARROLL, KORTZ, HARHAI, SCAVELLO, PYLE, CAUSER, TAYLOR, RAPP, MAHER, GINGRICH, HICKERNELL, MILNE, C. HARRIS, MACKENZIE, REESE, MARSHALL, P. DALEY, STEVENSON, BENNINGHOFF, READSHAW AND WHITE, JUNE 3, 2013
SENATOR GREENLEAF, JUDICIARY, IN SENATE, AS AMENDED, JUNE 10, 2014
1Amending Title 20 (Decedents, Estates and Fiduciaries) of the
2Pennsylvania Consolidated Statutes, in powers of attorney,
3further providing for general provisions and for special
4rules for gifts; providing for agent's duties and for
5principles of law and equity; further providing for form of
6power of attorney, for implementation of power of attorney
7and for liability; providing for liability for refusal to
8accept power of attorney and for activities through
9employees; and further providing for validity.
15§ 5601. General provisions.
16* * *
1(1) A power of attorney shall be dated, and it shall be
2signed [and dated] by the principal by signature or mark, or
3by another individual on behalf of and at the direction of
4the principal <-if the principal is unable to sign but
5specifically directs another individual to sign the power of
7(2) If the power of attorney is executed by mark or by
8another individual, then it shall be witnessed by two
9individuals, each of whom is 18 years of age or older. A
10witness shall not be the individual who signed the power of
11attorney on behalf of and at the direction of the principal.
12(3) For a power of attorney executed on or after the
13effective date of this paragraph, the signature or mark of
14the principal, or the signature or mark of another individual
15signing a power of attorney on behalf of <-and at the direction
16of the principal, shall be:
17(i) Acknowledged before a notary public or other
18individual authorized by law to take acknowledgments. <-The
19notary public or other individual authorized by law to
20take acknowledgments shall not be the agent designated in
21the power of attorney.
22(ii) Witnessed by two individuals, each of whom is
<-23at least 18 years of age 18 years of age or older. A
24witness shall not be the individual who signed the power
25of attorney on behalf of and at the direction of the
26principal<-., the agent designated in the power of attorney
27or the notary public or other person authorized by law to
28take acknowledgments before whom the power of attorney is
30(c) Notice.--All powers of attorney shall include the
1following notice in capital letters at the beginning of the
2power of attorney. The notice shall be signed by the principal.
3In the absence of a signed notice, upon a challenge to the
4authority of an agent to exercise a power under the power of
5attorney, the agent shall have the burden of demonstrating that
6the exercise of this authority is proper.
8The purpose of this power of attorney is to give the
9person you designate (your "agent") broad powers to handle
10your property, which may include powers to sell or otherwise
11dispose of any real or personal property without advance
12notice to you or approval by you.
13This power of attorney does not impose a duty on your
14agent to exercise granted powers, but when powers are
15exercised, your agent must use due care to act for your
16benefit and in accordance with this power of attorney.
17Your agent may exercise the powers given here throughout
18your lifetime, even after you become incapacitated, unless
19you expressly limit the duration of these powers or you
20revoke these powers or a court acting on your behalf
21terminates your agent's authority.
22Your agent must [keep your funds separate from your
23agent's funds.] act in accordance with your reasonable
24expectations to the extent actually known by your agent and,
25otherwise, in your best interest, act in good faith and act
26only within the scope of authority granted by you in the
27power of attorney.
16(d) Acknowledgment executed by agent.--An agent shall have
17no authority to act as agent under the power of attorney unless
18the agent has first executed and affixed to the power of
19attorney an acknowledgment in substantially the following form:
,have read the attached power of
21attorney and am the person identified as the agent for
22the principal. I hereby acknowledge that [in the absence
23of a specific provision to the contrary in the power of
24attorney or in 20 Pa.C.S.] when I act as agent:
25I shall [exercise the powers for the benefit of the
26principal] act in accordance with the principal's
27reasonable expectations to the extent actually known by
28me and, otherwise, in the principal's best interest, act
29in good faith and act only within the scope of authority
30granted to me by the principal in the power of attorney.
3I shall exercise reasonable caution and prudence.
17(3) Exercise reasonable caution and prudence.
22[(1) Subsections (c), (d) and (e) do not apply to a
23power or a power of attorney contained in an instrument used
24in a commercial transaction which simply authorizes an agency
25relationship. This paragraph includes the following:
1(iii) A power contained in the governing document
2for a corporation, partnership or limited liability
3company or other legal entity by which a director,
4partner or member authorizes others to do other things on
5behalf of the entity.
8(v) A power given to a dealer as defined by the act
9of December 22, 1983 (P.L.306, No.84), known as the Board
10of Vehicles Act, when using the power in conjunction with
11a sale, purchase or transfer of a vehicle as authorized
12by 75 Pa.C.S. § 1119 (relating to application for
13certificate of title by agent).]
19(ii) A power to the extent it is coupled with an
20interest in the subject of the power, including a power
21given to or for the benefit of a creditor in connection
22with a loan or other credit transaction.
25(iv) A power contained in the governing document for
26a corporation, partnership or limited liability company
27or other legal entity by which a director, partner or
28member authorizes others to do other things on behalf of
29the entity or a proxy or other delegation to exercise
30voting rights or management rights with respect to a
4(vi) A power given to a dealer as defined by the act
5of December 22, 1983 (P.L.306, No.84), known as the Board
6of Vehicles Act, when using the power in conjunction with
7a sale, purchase or transfer of a vehicle as authorized
8by 75 Pa.C.S. § 1119 (relating to application for
9certificate of title by agent).
16(e.2) Limitation on applicability in health care [power] and
17mental health care powers of attorney.--Subsections (b)(3)(i),
18(c) and (d) and section 5601.3 (relating to agent's duties) do
19not apply to a power of attorney which exclusively provides for
20health care decision making or mental health care decision
22(f) [Definition.--As used in this chapter, the term "agent"
23means a person designated by a principal in a power of attorney
24to act on behalf of that principal.] Definitions.--The following
25words and phrases when used in this chapter shall have the
26meanings given to them in this subsection unless the context
27clearly indicates otherwise:
30"Good faith." Honesty in fact.
1Section 2. Section 5601.2 of Title 20 is repealed:
2[§ 5601.2. Special rules for gifts.
21(2) In the case of any gift to a minor, that gift may be
22made in trust or in accordance with Chapter 53 (relating to
23Pennsylvania Uniform Transfers to Minors Act) or section 5155
24(relating to order of court).
25(3) In the case of any gift made in trust, the agent may
26execute a deed of trust for such purpose, designating one or
27more persons, including the agent, as original or successor
28trustees, or may make an addition to an existing trust.
1one or more permissible donees.
4(e) Equity.--An agent and the donee of a gift shall be
5liable as equity and justice may require to the extent that, as
6determined by the court, a gift made by the agent is
7inconsistent with prudent estate planning or financial
8management for the principal or with the known or probable
9intent of the principal with respect to disposition of the
14Section 3. Title 20 is amended by adding sections to read:
15§ 5601.3. Agent's duties.
21(2) Act in good faith.
26(1) Act loyally for the principal's benefit.
<-27(1.1) Keep the agent's funds separate from the
28principal's funds after the date of execution of the power of
29attorney, unless the funds were not kept separate as of the
30date of the execution of the power of attorney.
15(5) Cooperate with a person who has authority to make
16health care decisions for the principal to carry out the
17principal's reasonable expectations to the extent actually
18known by the agent and, otherwise, act in the principal's
20(6) Attempt to preserve the principal's estate plan, to
21the extent actually known by the agent, if preserving the
22plan is consistent with the principal's best interest based
23on all relevant factors, including:
3(c) Nonliability of agent.--
7(2) An agent that acts with care, competence and
8diligence for the best interest of the principal shall not be
9liable solely because the agent also benefits from the act or
10has an individual or conflicting interest in relation to the
11property or affairs of the principal.
12(3) If an agent is selected by the principal because of
13special skills or expertise possessed by the agent or in
14reliance on the agent's representation that the agent has
15special skills or expertise, the special skills or expertise
16must be considered in determining whether the agent has acted
17with care, competence and diligence under the circumstances.
21(5) An agent that exercises authority to delegate to
22another person the authority granted by the principal or that
23engages another person on behalf of the principal shall not
24be liable for an act, error of judgment or default of that
25person if the agent exercises care, competence and diligence
26in selecting and monitoring the person.
27(d) Disclosure of receipts, disbursements or transactions.--
1of the principal unless ordered by a court or requested by
2the principal, a guardian, conservator, another fiduciary
3acting for the principal, governmental agency having
4authority to protect the welfare of the principal or, upon
5the death of the principal, the personal representative or
6successor in interest of the principal's estate.
7(2) Within 30 days of the request, the agent shall
8either comply with the request or provide a writing or other
9record substantiating the reason additional time is needed,
10in which case the agent shall comply with the request within
11an additional 30 days.
14(a) General rule.--An agent under a power of attorney may do
15the following on behalf of the principal or with the principal's
16property only if the power of attorney expressly grants the
17agent the authority and exercise of the authority is not
18otherwise prohibited by another agreement or instrument to which
19the authority or property is subject:
23(2) Make a gift.
24(3) Create or change rights of survivorship.
25(4) Create or change a beneficiary designation.
3(8) Disclaim property, including a power of appointment.
4(b) Limitation.--Notwithstanding a grant of authority to do
5an act described in subsection (a), unless the power of attorney
6otherwise provides, an agent that is not an ancestor, spouse or
7descendant of the principal may not exercise authority under a
8power of attorney to create in the agent, or in an individual to
9whom the agent owes a legal obligation of support, an interest
10in the principal's property, whether by gift, right of
11survivorship, beneficiary designation, disclaimer or otherwise.
12(c) Scope of authority.--Subject to subsections (a), (b),
13(d), and (e), if a power of attorney grants to an agent
14authority to do all acts that a principal is authorized to
15perform, the agent has <-the general authority described in all of
16the powers which may be incorporated by reference pursuant to
21(e) Similar or overlapping subjects.--Subject to subsections
22(a), (b) and (d), if the subjects over which authority is
23granted in a power of attorney are similar or overlap, the
24broadest authority controls.
25(f) Property.--Authority granted in a power of attorney is
26exercisable with respect to property that the principal has when
27the power of attorney is executed or acquires later, whether or
28not the property is located in this State and whether or not the
29authority is exercised or the power of attorney is executed in
1(g) Legal effect of agent's actions.--An act performed by an
2agent pursuant to a power of attorney has the same effect and
3inures to the benefit of and binds the principal and the
4principal's successors in interest as if the principal had
5performed the act.
11§ 5602. Form of power of attorney.
12(a) Specification of powers.--A principal may, by inclusion
13of the language quoted in any of the following paragraphs or by
14inclusion of other language showing a similar intent on the part
15of the principal, empower an agent to do any or all of the
16following, each of which is defined in section 5603 (relating to
17implementation of power of attorney):
18* * *
19[(5) "To disclaim any interest in property."]
20* * *
21(17) "To engage in insurance and annuity transactions."
22* * *
26* * *
27(c) Filing and recording of power of attorney.--An
28originally executed [copy of the] power of attorney may be filed
29with the clerk of the orphans' court division of the court of
30common pleas in the county in which the principal resides, and
1if it is acknowledged, it may be recorded in the office for the
2recording of deeds of the county of the principal's residence
3and of each county in which real property to be affected by an
4exercise of the power is located. A power of attorney executed
5in electronic form may be recorded in the same manner as a
6document subject to the act of July 5, 2012 (P.L.935, No.100),
7known as the Uniform Real Property Electronic Recording Act. The
8clerk of the orphans' court division or any office for the
9recording of deeds with whom the power has been filed, may, upon
10request, issue certified copies of the power of attorney. Each
11such certified copy shall have the same validity and the same
12force and effect as if it were the original, and it may be filed
13of record in any other office of this Commonwealth (including,
14without limitation, the clerk of the orphans' court division or
15the office for the recording of deeds) as if it were the
17(d) Copy of power of attorney.--Except for the purpose of
18filing or recording under subsection (c), a photocopy or
19electronically transmitted copy of an originally executed power
20of attorney has the same effect as the original.
24§ 5603. Implementation of power of attorney.
25[(a) Power to make limited gifts.--
3(ii) During each calendar year, the gifts made to
4any permissible donee, pursuant to such power, shall have
5an aggregate value not in excess of, and shall be made in
6such manner as to qualify in their entirety for, the
7annual exclusion from the Federal gift tax permitted
8under section 2503(b) of the Internal Revenue Code of
91986 (Public Law 99-514, 26 U.S.C. § 1 et seq.) for the
10principal and, if applicable, the principal's spouse.
11(iv) In addition to the gifts authorized by
12subparagraphs (i) and (ii), a gift made pursuant to such
13power may be for the tuition or medical care of any
14permissible donee to the extent that the gift is excluded
15from the Federal gift tax under section 2503(e) of the
16Internal Revenue Code of 1986 as a qualified transfer.
17(v) The agent may consent, pursuant to section
182513(a) of the Internal Revenue Code of 1986, to the
19splitting of gifts made by the principal's spouse to the
20principal's issue or a spouse of the principal's issue in
21any amount and to the splitting of gifts made by the
22principal's spouse to any other person in amounts not
23exceeding the aggregate annual gift tax exclusions for
24both spouses under section 2503(b) of the Internal
25Revenue Code of 1986.]
26(a.1) Power to make limited gifts.--
27(1) Unless the power of attorney otherwise provides, the
28power to make limited gifts or other language in a power of
29attorney granting general authority with respect to gifts
30authorizes the agent only to:
1(i) Make outright to or for the benefit of a person,
2a gift of any of the principal's property, including by
3the exercise of a presently exercisable general power of
4appointment held by the principal:
5(A) in an amount per donee not to exceed the
6annual dollar limits of the Federal gift tax
7exclusion under section 2503(b) of the Internal
8Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
92503(b)), without regard to whether the Federal gift
10tax exclusion applies to the gift; or
11(B) if the principal's spouse agrees to consent
12to a split gift pursuant to section 2513 of the
13Internal Revenue Code of 1986 (26 U.S.C. § 2513), in
14an amount per donee not to exceed twice the annual
15Federal gift tax exclusion limit.
16(ii) Consent, pursuant to section 2513 of the
17Internal Revenue Code of 1986, to the splitting of a gift
18made by the principal's spouse in an amount per donee not
19to exceed the aggregate annual gift tax exclusions for
21(2) An agent may make a gift of the principal's property
22only as the agent determines is consistent with the
23principal's objectives if actually known by the agent and, if
24unknown, as the agent determines is consistent with the
25principal's best interest based on all relevant factors,
8(3) As used in this subsection, the phrase "a gift for
9the benefit of a person" includes a gift to a trust, an
10account under Chapter 53 (relating to Pennsylvania Uniform
11Transfers to Minors Act) and a tuition savings account or
12prepaid tuition plan as defined under section 529 of the
13Internal Revenue Code of 1986 (26 U.S.C. § 529).
14* * *
15[(e) Power to disclaim any interest in property.--A power
16"to disclaim any interest in property" shall mean that the agent
17may release or disclaim any interest in property on behalf of
18the principal in accordance with Chapter 62 (relating to
19disclaimers) or section 6103 (relating to release or disclaimer
20of powers or interests), provided that any disclaimer under
21Chapter 62 shall be in accordance with the provisions of section
226202 (relating to disclaimers by fiduciaries or agents) in the
23case of a principal who shall have been adjudicated an
24incapacitated person at the time of the execution of the
26* * *
30* * *
5* * *
9(1) Purchase, continue, renew, convert or terminate any
10type of insurance (including, but not limited to, life,
11accident, health, disability or liability insurance) or
12annuity and pay premiums and collect benefits and proceeds
13under insurance policies and annuity contracts.
16(3) In general, exercise all powers with respect to
17insurance and annuities that the principal could if present;
18[however, the agent cannot designate himself beneficiary of a
19life insurance policy unless the agent is the spouse, child,
20grandchild, parent, brother or sister of the principal. An
21agent and a beneficiary of a life insurance policy shall be
22liable as equity and justice may require to the extent that,
23as determined by the court, a beneficiary designation made by
24the agent is inconsistent with the known or probable intent
25of the principal] provided, however, that the agent shall
26have no power to create or change a beneficiary designation
27unless authorized in accordance with section 5601.4 (relating
28to authority that requires specific and general grant of
30(q) Power to engage in retirement plan transactions.--A
1power to "engage in retirement plan transactions" shall mean
2that the agent may contribute to, withdraw from and deposit
3funds in any type of retirement plan (including, but not limited
4to, any tax qualified or nonqualified pension, profit sharing,
5stock bonus, employee savings and retirement plan, deferred
6compensation plan or individual retirement account), select and
7change payment options for the principal, make roll-over
8contributions from any retirement plan to other retirement plans
9and, in general, exercise all powers with respect to retirement
10plans that the principal could if present[. However, the agent
11cannot designate himself beneficiary of a retirement plan unless
12the agent is the spouse, child, grandchild, parent, brother or
13sister of the principal. An agent and a beneficiary of a
14retirement plan shall be liable as equity and justice may
15require to the extent that, as determined by the court, a
16beneficiary designation made by the agent is inconsistent with
17the known or probable intent of the principal] provided,
18however, that the agent shall have no power to create or change
19a beneficiary designation unless authorized in accordance with
21* * *
<-22(v) Powers generally.--
23(1) All powers described in this section shall be
24exercisable with respect to any matter in which the principal
25is in any way interested at the giving of the power of
26attorney or thereafter and whether arising in this
27Commonwealth or elsewhere.
30Section 6 <-5. Section 5608 of Title 20 is amended to read:
3[(a) Third party liability.--Any person who is given
4instructions by an agent in accordance with the terms of a power
5of attorney shall comply with the instructions. Any person who
6without reasonable cause fails to comply with those instructions
7shall be subject to civil liability for any damages resulting
8from noncompliance. Reasonable cause under this subsection shall
9include, but not be limited to, a good faith report having been
10made by the third party to the local protective services agency
11regarding abuse, neglect, exploitation or abandonment pursuant
12to section 302 of the act of November 6, 1987 (P.L.381, No.79),
13known as the Older Adults Protective Services Act.
18(c) Genuineness.--A person who in good faith accepts a power
19of attorney without actual knowledge that a signature or mark of
20any of the following are not genuine may, without liability,
21rely upon the genuineness of the signature or mark of:
22(1) The principal.
25(3) A witness.
13(1) An agent's certification under penalty of perjury of
14any factual matter concerning the principal, agent or power
15of attorney or an affidavit under section 5606 (relating to
16proof of continuance of powers of attorney by affidavit).
20(3) An opinion of counsel relating to whether the agent
21is acting within the scope of the authority granted by the
22power of attorney, if the person making the request provides
23in a writing or other record the reason for the request.
24(f) Additional request for information.--A person who has
25accepted a power of attorney, whether or not the person has a
26certification or opinion of counsel under subsection (e) or an
27affidavit under section 5606, and has acted upon it by allowing
28the agent to exercise authority granted under the power of
29attorney, shall not be precluded from requesting at later times
30a certification or opinion of counsel under this subsection,
4(g) English translation.--An English translation or an
5opinion of counsel requested under this section shall be at the
6principal's expense, unless the request is made more than seven
7business days after the power of attorney<- is presented for
8acceptance. <-or any revision or addition to a power of attorney:
9(1) is presented for acceptance; or
24Section 7 <-6. Title 20 is amended by adding sections to read:
25§ 5608.1. Liability for refusal to accept power of attorney.
28(1) A person shall either:
29(i) accept a power of attorney; or
30(ii) request one of the following:
9(2) If a person requests a certification, a translation,
10an affidavit under section 5606 or an opinion of counsel
11under section 5608(e), the person shall accept the power of
12attorney not later than five business days after receipt of
13the certification, translation, affidavit or opinion of
14counsel or, unless the information provided by the
15certification, translation, affidavit or opinion of counsel
16provides a substantial basis for making a further request
17under section 5606 or 5608(e).
11(5) A request for a certification, a translation, an
12affidavit under section 5606 or an opinion of counsel under
13section 5608(e) is refused, including a certification, an
14affidavit or an opinion of counsel requested to demonstrate
15that the exercise of authority pursuant to a power of
16attorney is proper without the notice provided for under
17section 5601(c), except as provided under section 5601(e.1)
19(6) The person in good faith believes that the power of
20attorney is not valid or the agent does not have the
21authority to perform the act requested, whether or not a
22certification, a translation, an affidavit under section 5606
23or opinion of counsel under section 5608(e) has been
24requested or provided.
25(7) The person makes a report to the local protective
26services agency under section 302 of the act of November 6,
271987 (P.L.381, No.79), known as the Older Adults Protective
28Services Act, stating a good faith belief that the principal
29may be subject to physical or financial abuse, neglect,
30exploitation or abandonment by the agent or someone acting
1for or with the agent.
2(8) The person has actual knowledge that another person
3has made a report to the local protective services agency
4under section 302 of the Older Adults Protective Services
5Act, stating a good faith belief that the principal may be
6subject to physical or financial abuse, neglect, exploitation
7or abandonment by the agent or someone acting for or with the
11(1) Civil liability for pecuniary harm to the economic
12interests of the principal proximately caused by the person's
13refusal to comply with the instructions of the agent
14designated in the power of attorney.
24§ 5608.2. Activities through employees.
25For the purposes of sections 5608 (relating to acceptance of
26and reliance upon power of attorney) and 5608.1 (relating to
27liability for refusal to accept power of attorney), the
28following shall apply:
8Section 8 <-7. Section 5611 of Title 20 is amended to read:
9§ 5611. Validity.
10A power of attorney executed in [another state or
11jurisdiction and in conformity with the laws of that state or
12jurisdiction shall be considered valid in this Commonwealth,
13except to the extent that the power of attorney executed in
14another state or jurisdiction would allow an agent to make a
15decision inconsistent with the laws of this Commonwealth.] or
16under the laws of another state or jurisdiction shall be valid
17in this Commonwealth if, when the power of attorney was
18executed, the execution complied with:
19(1) the law of the jurisdiction indicated in the power
20of attorney and, in the absence of an indication of
21jurisdiction, the law of the jurisdiction in which the power
22of attorney was executed; or
25Section 9 <-8. Title 20 is amended by adding a section read:
26§ 5612. Principles of law and equity.
29Section 10 <-9. The following shall apply:
30(1) Except as provided by this section, the provisions
1of this act apply to powers of attorney created before, on or
2after the respective effective dates of such provisions, but
3do not apply to the acts or omissions of agents, or third
4parties presented with instructions by agents, that occur
5before such respective effective dates.
6(2) Except as provided by this section, the provisions
7of this act apply to judicial proceedings concerning a power
8of attorney commenced before, on or after the respective
9effective dates of such provisions, unless the court finds
10that application of a provision of this act would
11substantially interfere with the effective conduct of the
12judicial proceeding or prejudice the rights of a party, in
13which case that provision does not apply and the superseded
15(3) The amendment, addition or repeal of 20 Pa.C.S. §§
165601(b), (c), (d) and (e.2), 5601.2, 5601.4, 5602(a)(5) and
17(17) and 5603 apply only to powers of attorney created on or
18after the effective dates of those provisions.
19(4) The amendment of 20 Pa.C.S. §§ 5601(f) and 5608
20shall apply retroactively to acts performed after December
2115, 1992, and to judicial proceedings commenced prior to the
22effective dates of those provisions.
23(5) In interpreting and applying the amendment or
24addition of 20 Pa.C.S. §§ 5601(f), 5608, 5608.1, 5608.2 and
255611, a court shall give due consideration of the intent of
26the General Assembly to reverse the interpretation of 20
27Pa.C.S. § 5608 as set forth in Teresa M. Vine v. Commonwealth
28of Pennsylvania, State Employees' Retirement Board, 9 A.3d
291150 (Pa. 2010).
30Section 11 <-10. This act shall take effect as follows:
4(2) This section shall take effect immediately.