Why Agents Should DELAY Signing the Acknowledgment on a Power of Attorney

Written by Erik Sprulin

A Durable Power of Attorney (POA) is a vital legal instrument that allows a person (the Principal) to appoint someone else (the Agent) to manage their financial and legal affairs. Each agent is required to sign an acknowledgment affirming their understanding and acceptance of the responsibilities and duties imposed by the POA before the agent can use the document. However, the law does not mandate that this acknowledgment be signed simultaneously with the principal’s execution of the POA. In fact, it is typically advisable for the agent to postpone signing the acknowledgment until they are prepared to act under the authority granted.

1. Commencement of Fiduciary Duties and Potential Liability

An agent’s fiduciary duties commence upon signing the acknowledgment. Delaying this signature until the agent is ready to act helps prevent unnecessary exposure to liability. If the acknowledgment is signed immediately but the agent does not act for an extended period, they may still be held accountable for that time frame. Should a court request an accounting of the agent’s actions, the period in question could extend back to the date of acknowledgment, even if the agent had not undertaken any activities on behalf of the principal during that time. This could lead to complications in demonstrating the absence of transactions or decisions made during the interim. In Estate of Rees, 2018 PA Super 186, the Pennsylvania Superior Court held that an Agent under a Power of Attorney could be compelled to provide a full accounting of their actions beginning from the date they signed the acknowledgment—even though they had not yet undertaken any duties. The Court emphasized that by signing the acknowledgment, the Agent had “accepted the fiduciary role” and triggered the duty to maintain records under 20 Pa.C.S. § 5601.3(b). Why undertake a fiduciary role and obligation before the need arises?

2. Avoiding Premature Establishment of a Confidential Relationship

In Pennsylvania, a confidential relationship is recognized when one party places trust in another, who is then expected to act in the former’s best interest. By signing the acknowledgment prematurely, an agent may inadvertently establish such a relationship before any actions are taken. This could have legal implications, especially if disputes arise regarding the agent’s influence over the principal’s decisions. Delaying the acknowledgment helps ensure that the confidential relationship—and the associated responsibilities—begin only when the agent actively undertakes their duties. The establishment of a confidential relationship can also open the door to claims of undue influence, particularly if the agent benefits from transactions involving the principal. In situations where the principal is of weakened intellect, and the agent stands to gain substantially, courts may presume undue influence on the part of the agent. Case law suggests that merely serving as the principal’s agent under a POA is enough to create a confidential relationship, which disadvantages the agent if there is ever litigation alleging undue influence. Delaying signing the acknowledgment until the agent is ready to act can help mitigate these risks by clearly delineating the time frame during which the agent’s influence could be scrutinized.

Conclusion

Unless immediate action is needed, agents should hold off on signing the acknowledgment until they are prepared to assume the role and begin using the POA. This helps protect the agent from retroactive liability and confusion about when their fiduciary obligations began. Attorneys often advise clients to store the signed Power of Attorney and leave the acknowledgment unsigned until it is time to activate the document. When the time comes, the Agent can sign the acknowledgment and begin acting in accordance with their duties. While Pennsylvania law requires agents to sign an acknowledgment to validate their authority under a Durable Power of Attorney, it does not stipulate when this must occur. For the reasons outlined above—ranging from liability concerns to the avoidance of burden shifting in undue influence claims—it is prudent for agents to delay signing the acknowledgment until they are prepared to act on the principal’s behalf. This approach helps protect both the agent and the principal, ensuring that the fiduciary relationship commences at an appropriate and clearly defined time.