Durable Power of Attorneys and Changes to the Law

A Durable Power of Attorney can cover a wide variety of financial issues. Depending on the content of the document, it gives authority to your appointee, called an attorney-in-fact or agent, to "step into your shoes" and make financial and other legal decisions for you if you cannot make your own decisions, or are otherwise unavailable.


An important detail to keep in mind is that not all Powers of Attorney will be valid should you be declared incompetent or incapacitated by a court. Your Power of Attorney must be "durable" and must state that the document is not affected by your subsequent incapacity and shall survive your incapacity. If this language is not in your document, your Power of Attorney will be invalid upon a court declaring you incapacitated. 


There are a great number of "forms" available regarding these three documents. It is important to remember these forms are usually basic and not necessarily tailored to the laws of your state or your situation. Seeking the advice of an attorney is always the best idea when executing any of these documents. One's personal situation is unique and an attorney can provide advice for your particular needs, which cannot be found on the back of a box.


NEW POWER OF ATTORNEY ACT EFFECTIVE 2011


On October 1, 2011, a new act controlling Florida Powers of Attorney took affect. 


All Powers of Attorney executed before October 1, 2011 are valid, however, there are certain powers that may longer be created under this Act and may be "ineffective". If you have a Power of Attorney executed before October 1, 2011, have an attorney review it to be sure what powers you wish for your attorney-in-fact to have are covered. 

The Act created a problem for certain pre-October 1, 2011 Powers of Attorney, such as those with "Springing" powers. Springing powers state the document is valid only starting on a some future certain date or when a certain event occurs. If those events have not occurred yet, then the Attorney-In-Fact can not use the document.  Powers of Attorney with springing powers are "ineffective" according to the new statutes and cannot be created after September 30, 2011. Springing powers have been used  to keep an attorney-in-fact from abusing the power. Some attorneys, instead of using a springing power, will hold onto all copies and originals until the power of attorney is needed. That way, the attorney can investigate the situation and make sure the need for it is present. One still may execute Limited Powers of Attorney for specific tasks, such as solely for the sale of a house.




The Act also created a list of Duties of the Attorney-In-Fact. These duties are mostly ones of common sense and duties of honesty, such as acting in good faith, keeping good records, be loyal and act with best interest to preserve estate plan. These duties of the attorney-in-fact can be found here.




Another change the Act brought is there can be no "general" or "blanket" power of attorney. If the attorney-in-fact is to have the authority to perform a specific act, that power has to be specified in the document. Many legal kits (such as one you would get at an office store) have general one-page forms. For example, in the past an Attorney-In-Fact could enter a safe-deposit box with such a "general" Power of Attorney. Now, a Power of Attorney must state that the Attorney-In-Fact has authorization to enter a current safe deposit box. 

A Durable Power of Attorney differs from a Healthcare Surrogate/Power of Attorney in that the Healthcare Surrogate is solely for health and medically related issues. Some Durable Powers of Attorney give authority to make health decisions but many do not. Health professionals prefer documents that are geared specifically to health and medical decisions.


New POAs (created October 1, 2011 or later) will have to meet certain requirements for certain powers to be valid. These include:
-Must state that all previously executed POAs are revoked,
-Investment & Banking powers should reference statute
-Gift provision and Trust provision must be initialed to be valid
-New list of items a POA does not have the authority or power to do 
-Must be witnessed and notarized




Other changes include the provision that photocopies are as good as the originals. This is important due to the fact that an attorney-in-fact with a photocopy will have the convenience of using the copy instead of hunting down the original in a situation of emergency. However, this convenience highlights the importance of one's choice of an attorney-in-fact as many folks provide their appointees with photocopies for "just in case" situations. A mischievous individual may use this in a fraudulent manner. 


Powers of Attorney executed under another state's laws may be used in Florida if they were properly executed in that other state, however, they will be subject to Florida’s Power of Attorney Act and other statutes. The attorney-in-fact may only perform acts that Florida law allows and by the terms of the Power of Attorney.


WHAT AN ATTORNEY-IN-FACT MAY NOT DO


An attorney-in-fact may not perform acts that require specific and personal knowledge of the person. These acts include: voting, signing affidavits swearing to personal knowledge, creating or revoking a will, taking the place of the person (such as taking the person's place as Trustee or Guardian) or fulfilling contracts of personal service.


____________________________________________________



Only a few of the changes have been mentioned here. It is important to seek the advice of an attorney when considering execution of a Durable Power of Attorney because each person's situation is different. The attorney may see issues in your personal situation that you do not see and cannot prepare for from a box.


Finally, it is always important to discuss your decisions first, before signing your documents, with the person you are appointing. Do not assume because the person is older than you, or if they have been through a similar situation before, that they would be ready, willing and able to be your appointee. Such discussions can be useful not only in your own planning but in your peace of mind that your appointee will be ready should such an unfortunate time occur. 

If You Are 18 or Older, Make Sure You Have These Documents

If you are 18, or older, in addition to a Will you should have a General Durable Power of Attorney, Healthcare Surrogate and a Living Will.

These three (3) documents give your authorization to your appointee so they may make medical and financial decisions for you if you are, for whatever reason, mentally incapacitated or otherwise unable to make those decisions for yourself. You may not be mentally incompetent, but perhaps you have been rendered unable to communicate through an accident or medical coma.

Hospitals and physicians do not necessarily act immediately upon decisions your spouse, parents or other close relatives make for you. Often relatives argue, such as the parent or spouse of a patient arguing with the adult child of a patient. Other times patients have life/domestic partners which the hospital may not recognize as having the legal authority to make these medical decisions. To protect themselves, the medical personnel will require legal authority.

Likewise, with financial decisions, unless the other person is a co-owner or authorized signator on your accounts at a bank, the bank will not discuss your accounts with your loved ones without proper authority. In other situations, one might have an accident due to a third party's malicious act or negligence, and the injured person's loved ones need to get payment from the third party for medical expenses. The loved ones will need authority to do that if the injured person cannot speak for themselves; as an adult, the parent or loved one needs to show proof of the express authority to act on the injured person's behalf.

Without these documents, in some situations your loved ones may be forced to go to court and open a guardianship for you so they can be appointed as your guardian and gain the authority to make these decisions. This can be costly and extremely time consuming. Once a guardianship is opened and a guardian appointed, your guardian must ask the court permission to withdraw any funds or make other important decisions. The guardian is responsible to the court for yearly reports regarding the financial accounts and your physical well-being. The financial accountings will be audited by a court appointed accountant. In some situations, guardianships are useful to protect the "ward" (the minor person or person unable to act for themselves), but in many situations are not needed if the proper people have authority to act. These three documents can help your loved ones avoid this hassle during a difficult and painful time.

Young people think they will live forever, and of course, that is not true. Once one becomes an adult, their parents no longer have the authority to make certain decisions for their children. It is best to "plan for the worst and hope for the best".

These documents only have authority while you are alive. Once you die, your authority dies with you, becoming void at the time of your death.