October 30, 2014
PA Regulatory &
Legislative Update
Raymond Pepe
© Copyright 2014 by K&L Gates LLP. All rights reserved.
Act 95 of 2014:
Power of Attorney Amendments
New Requirements for Execution of Powers
of Attorney
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Two Witnesses Required
Notarization of Principal’s Signature or Mark Required
Modified Notice Form for Signature by Principal
Modified Acknowledgment Form for Agents
Apply to Powers Executed On or After1/1/15
Not Applicable to Commercial Powers of Attorney,
Except for Notarization Requirements
REVISIONS TO PRINCIPAL NOTICE
 Revised Fourth Paragraph of Notice
Your agent must [keep your funds separate from your agent's funds.] act in
accordance with your reasonable expectations to the extent actually known
by your agent and, otherwise, in your best interest, act in good faith and act
only within the scope of authority granted by you in the power of attorney.
The law permits you, if you choose, to grant broad authority to an agent
under power of attorney, including the ability to give away all of your
property while you are alive or to substantially change how your property is
distributed at your death. Before signing this document, you should seek
the advice of an attorney at law to make sure you understand it.
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REVISIONS TO AGENT ACKNOWLEDGMENT
 Revised Third Paragraph
I shall [exercise the powers for the benefit of the principal] act in accordance
with the principal's reasonable expectations to the extent actually known by
me and, otherwise, in the principal's best interest, act in good faith and act
only within the scope of authority granted to me by the principal in the power
of attorney.
[I shall keep the assets of the principal separate from my assets.
I shall exercise reasonable caution and prudence.
I shall keep a full and accurate record of all actions, receipts and
disbursements on behalf of the principal.]
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Expanded Immunities
A person who accepts a power of attorney without actual
knowledge that the power of attorney or the agent’s
authority is void, invalid or terminated; or that the agent is
exceeding or improperly exercising authority, “may, without
liability, rely upon the power of attorney as if the power of
attorney and the agent’s authority were genuine, valid and
still in effect and that the agent had not exceeded and had
properly exercised the authority”
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Alternatives to Acceptance
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Certification or Affidavit
Translation
Opinion of Counsel
Must be Requested Within 7 Days
Once Received Action Required Within 5 Days
May Be Relied Upon Without Liability
May be Subsequently Requested for Matters Not
Previously Addressed
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Liability for Failure to Accept
Power of Attorney Arises Unless:
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Certification/Translation/Opinion Not Provided
Transaction with Principal Not Required
Transaction Inconsistent with Power of Attorney Law
Transaction Inconsistent with Any Other Law
Knowledge of Termination of Power or Agent’s Authority
Reported Filed Under Older Adult Protective Services Act
Power Not Subject to PA Law or on Government Form
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Actual Knowledge
Based on Knowledge of Employee
Conducting Transaction Unless Employee
Acts With Conscious Disregard or Willful
Ignorance of the Existence of Facts
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MANDATORY DUTIES
Applicable to All Powers Effective 1/1/15
 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.
 Act in good faith
 Act only within the scope of authority granted
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Default Duties
Applicable to All Powers 1/1/15 Unless Waived or Modified
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Act Loyally for Principal’s Benefit
Segregate Funds of Principal & Agent
Not Create Conflicts with Principal’s Best Interest
Act with Care, Competence and Diligence
Keep Records of Receipts, Disbursements & Transactions
Cooperate Health Care Agents
Attempt to Preserve Principal’s Estate Plan
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Limits on Liability of Agent
 Not Liable to Beneficiaries for Good Faith Action
 No Liability Solely Because Agent Benefits From or Has
Interests That Conflict With Principal’s If Agent Acts in
Principal’s Best Interest
 No Liability for Investment Losses Absent Breach of Duty
 No Liability For Acts of Person Delegated Duties If Person
Selected and Monitored With Reasonable Care
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Acts that Require Specific Authority
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Gifts
Intervivos Trusts
Change Rights of Survivorship or Beneficiaries
Delegate Authority
Waive Rights to Survivorship Annuity
Exercise Principal’s Fiduciary Powers
Disclaim Property of Powers of Appointment
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Act 52 of 2013: Estate & Trust Tax
Amendments Effective 1/1/14
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Personal Income Tax Amendments
 Withholding Required for Nonresident
Beneficiaries of Estates and Trusts
 Returns Required for Estates and Trusts
with PA Source Income
 Statements Must be Issued for Distributions
to Resident Beneficiaries
 Trustee Liable for Failure to Keep Records
of Beneficiaries’ Names, Addresses & Tax IDs
McNeil v. Commonwealth
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Jurisdiction to Tax Trusts
PA Lacked Power to Tax Income of
Intervivos Trust Created by PA Settlor
with PA Beneficiaries if:
 Trust Has No Offices or Activities in PA
 Trustee Not Located in PA
 Trust Did Not Generate PA Source Income
Uniform Adult Guardianship and Protective
Proceedings Jurisdiction Act
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Standards For Jurisdiction
 “Home State” Based on Six Months
Continuous Presence Has Priority
 Substantial Connection State if No
Home State or Home State Declines
 Another State if No Home or Substantial
Connection State or Both Decline
 Any State As Needed to Address Emergency
Other Provisions
 Procedure to transfer orders
 Orders may be registered in any state and
upon registration are enforceable
 Courts authorized to consult with each other to
determine whether to take jurisdiction
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2015 Power Of Attorney Amendments
Needed To Correct Errors in Act 95
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Amendments Needed
 Exempt Commercial Power of Attorney From
Notarization and Application of Agent’s Duties
 Allow Attorney Acknowledgments
 Expand Definition of Power of Attorney to
Include All Powers Issued By Business Entities
As Authorized by Applicable Entity Law
Other Anticipated 2015 Power of Attorney
Amendments
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Source of Amendments
 Reintroduction of Senate Bill 621 of 2014
 Efforts to further Conform to the Uniform Power of
Attorney Act
 2010 Recommendations of the Decedents’ Estates
Advisory Committee
 Supreme Court Elder Abuse Task Force Report
Senate Bill 621 Amendments
 Health Care Agent Powers  Clarify Power to Handle
Interests in Estates &
 Relationship Between
Trusts Includes Authority to
Guardians & Agents
Receive Reports
 Add Short Form Power to
 Authorize Court’s in
Operate a Business
Accounting Proceedings to
 Add Short Form Power for
Assess Costs of Preparing
Personal & Family
and Filing Accounts
Maintenance
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Uniform Act Provisions
 Standing
 Remedies for Breach of
Agent’s Duties
 Exoneration of Agents
 General Powers of
Agents
 Statutory Form Power
 Acceptance of Power by
Agent
 Effectiveness of Power
Upon Incapacity
 Termination of Power
 Reimbursement and
Compensation of Agents
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DEAC Recommendations
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Disposition of Unclaimed Real Estate
Powers of Appointment
Minor Trust Code Amendments
Recodify Charitable Instruments Law
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2015 Amendments to Guardianship Law
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Standard Powers of Guardians
 Insure Property
 Action Against Other
Guardians
 Employ Custodians
 Take Deed-in-Lieu
 Manage Personal
Property
 Manage Investments
 Loans to Estate
 Renounce Fiduciary
Positions
 Manage Real Property
Actions That Require Court Approval
 Continue Operation of Business
 Organize Business Entities
 Buy, Sell or Exchange Real Property
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Corporate Fiduciaries
 Must Have Office in PA
 Bonding Required With Exemptions for PA Banks and
Limited Exemptions for Other Banks
 May Be Appointed Notwithstanding Priorities Granted
Others for Complex Estates
 Eliminates Restrictions on Non-PA Banks
 Sanctions for Failure to File Reports and Keep Records
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Liability of Guardian of Estate
 Liable to Estate for Failure to Exercise
Reasonable Care, Skill & Caution
 Not Liable on Contracts Unless
Guardianship Capacity Not Disclosed
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Power of Delegation
 Delegation of Duties Authorized
 Liable to Acts of Person Delegated Duties if
Guardian Fails to Exercise Reasonable Care in
Selecting, Defining Scope of Responsibility, and
Periodically Monitoring Person Exercising
Delegated Duties
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Third Party Liability & Immunity
 Liability for Damages for Failing to Comply
with Instructions of Guardian
“In Accordance with Terms of Guardianship”
 Immunity for Good Faith Reliance on
Guardianship Order
 May Request Copy of Order, Disclosure of
Limitations on Authority, and Confirmation
Order Remains in Effect
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Anticipated 2015 Older Adult Protective
Services Act Amendments
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Proposals Anticipated
 Obligation to Report Suspected Financial Abuse
May Be Imposed on Financial Institutions in
Addition to Filing SARs
 Obligation to Train Employees Regarding
Reporting Requirements Under State Law
 Authorization to Refuse to Conduct Transactions
Anticipated 2015 Consideration of Uniform
Fiduciary Access to Digital Assets Act
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Key Provisions
Personal Representatives, Trustees, Guardians
and Agents Granted Same Access to Digital Assets
as Tangible Assets Unless Otherwise Provided
by Will, Trust Agreement, Guardianship Order, or
Terms of Power of Attorney Notwithstand
Click-Through-Agreement Restrictions
New Uniform Law Commission Projects
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Drafting Committees
 2015 Adoption of Trust Decanting
Act Anticipated
 2014 First Reading of Divided
Trusteeship Act Anticipated
 2014 Formation of Committee to
Revise Uniform Guardianship and
Protective Proceedings Act
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