Although parents may be paying tuition, covering children under their health insurance, and even claiming them as dependents on their tax return, without a Power of Attorney that parent may be helpless to aid their adult aged child (over 18 years of age) with medical or financial matters.  Their doctors, hospitals, and even the college they attend, are limited in the information they are able to share with parents or other adults.  A Power of Attorney for medical and financial matters allows a college student, or any adult, to appoint someone to handle these matters for them if they are unable or unavailable to handle it themselves.

While they are home between semesters, you might want to consider speaking to an estate planning attorney who can help plan and put the proper documents in place to allow your young adult to appoint the person or persons they trust to handle financial and medical matters for them. If they have a serious illness or accident, having these documents in place can save the family time and significant costs by avoiding the immediate need to seek a court appointed guardian. If they are traveling abroad and need assistance with matters at home, the Power of Attorney will allow their agent to handle banking transactions, sign tax returns and many other types of matters for them.

Taking the time to be sure these documents are in place before they become necessary can save the family, and the young adult, time if an emergency arises and it becomes necessary to use them. 

For more information about Powers of Attorney, estate planning or Stephanie M. Shortall, Please visit us at ammlaw.com.

Although parents may be paying tuition, covering children under their health insurance, and even claiming them as dependents on their tax return, without a Power of Attorney that parent may be helpless to aid their adult aged child (over 18 years of age) with medical or financial matters.  Their doctors, hospitals, and even the college they attend, are limited in the information they are able to share with parents or other adults.  A Power of Attorney for medical and financial matters allows a college student, or any adult, to appoint someone to handle these matters for them if they are unable or unavailable to handle it themselves.

While they are home between semesters, you might want to consider speaking to an estate planning attorney who can help plan and put the proper documents in place to allow your young adult to appoint the person or persons they trust to handle financial and medical matters for them. If they have a serious illness or accident, having these documents in place can save the family time and significant costs by avoiding the immediate need to seek a court appointed guardian. If they are traveling abroad and need assistance with matters at home, the Power of Attorney will allow their agent to handle banking transactions, sign tax returns and many other types of matters for them.

Taking the time to be sure these documents are in place before they become necessary can save the family, and the young adult, time if an emergency arises and it becomes necessary to use them. 

For more information about Powers of Attorney, our Estate Planning services, or Stephanie Shortall, Please visit us at ammlaw.com.

Commercial lenders in Pennsylvania await action by the legislature to fix what appears to be an unintended byproduct of recent amendments to the Pennsylvania Probate, Estate and Fiduciaries (PEF) Code that went into effect earlier this year. You may be wondering what a statute that generally applies to trust and estate matters has to do with commercial lending transactions. The answer is that the recent changes applicable to powers of attorney generally could be interpreted to apply to powers of attorney granted in commercial loan documents, leases and other contracts (such as those granted in connection with confession of judgment clauses and certain other remedies). Historically, these statutory provisions did not apply to commercial agreements. It appears that the legislature was focusing on trust and estate documents when enacting this legislation and didn’t understand the impact of these amendments on commercial transactions.

These amendments are troubling from a lender’s perspective because they require that an agent must “act in accordance with the principal’s reasonable expectations to the extent actually known by the agent and, otherwise, in the principal’s best interest.” In a commercial loan transaction, the agent is the lender and the principal is the borrower, so the tension is obvious: a lender that is foreclosing on property, confessing judgment, collecting rents, or exercising Article 9 remedies  is not likely to be acting in the best interest of the borrower.

Pennsylvania House Bill #665 would amend the PEF Code to clarify that the power of attorney requirements do not apply to commercial transactions. This bill is presently in the Senate Judiciary Committee. Until this bill becomes law, lenders should consider making the following adjustments to commercial loan documents containing powers of attorney (typically these include documents with confessions of judgment, security agreements, assignments of rent, and mortgages):

• Include an acknowledgement by the borrower that its reasonable expectations include confession of judgment, foreclosure and other actions typically taken by a lender under the power of attorney;

• Include a waiver of the duties imposed by the PEF Code; and

• Add a notary page.

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.