Estate Planning and Elder Law practitioners in Pennsylvania routinely recommend to clients that they execute a Durable General Power of Attorney naming an agent to be empowered to act on their behalf as an essential estate planning instrument. At a recent seminar presented, in part, by Montgomery County Judge Ott, he outlined what he considered the standard to determine capacity for the principal who is executing a Pennsylvania Power of Attorney.
The Principal must:
1. Understand the nature of the authority delegated to the Agent(s); and
2. Understand the nature of his or her assets to be delegated to the Agent(s); and
3. Understand the meaning of the Power of Attorney Notice now required for all Power of Attorneys.
The attorney should establish and document that all three of these standards have been met in order to avoid the instrument being overturned (invalidated, revoked) on the basis of incapacity, which could expose the attorney and/or the Agent to complications and possible liablility.