Below is my summary of the pertinent sections of the Florida Power of Attorney Statutes (that relate to Elder Law and Medicaid Planning). This is not comprehensive and some sections have been omitted. This is meant for informational purposes only as the law and interpretations of the law may have changed since this article was written.
(1) Agent: the person granted authority to act for a principal under a power of attorney. “Agent” can be used interchangeably with “attorney-in-fact,” “co agent,” and “successor agent.”
(4) Durable: a type of power of attorney that is not terminated by the principal becoming incapacitated.
(7) Incapacity: when an individual is unable to take the actions necessary to obtain, administer, and dispose of real and personal property, intangible property, business property, benefits and income.
(9) Power of Attorney: a writing that grants authority to an agent or attorney-in-fact to act in the place of the principal, whether or not the writing actually says “power of attorney” (TIP - practically speaking it should).
(11) Principal: an individual who grants authority to an agent in a power of attorney.
(14) Sign: means having present intent to authenticate or adopt a record to (a) execute by signature or mark; or (b) attach or logically associate with the record a sound, symbol or process.
(15) Third person: any person other than the principal or the agent (while acting in their capacity as agent).
709.2104. Durable Power of Attorney. A power of attorney is durable if it contains the words: “This durable power of attorney is not terminated by subsequent incapacity of the principal except as provided in chapter 709, Florida Statutes,” or words to the same effect.
- Elder Law Attorney Comment: Not all durable power of attorneys are the same - in that they will not all accomplish the same goals. This is especially true with Medicaid-Planning which requires specific authority to conduct specific transactions that would otherwise be forbidden by a standard form durable power of attorney document.
709.2105. Qualification of Agent; How to Properly Execute a Power of Attorney. (1) An agent must be 18 years old or older; or a financial institution that has trust powers and authorized to conduct trust business in Florida.
(2) The power of attorney must be signed by the principal, in the presence of two subscribing witnesses, and acknowledged before a notary public. (3) If the principal is physically unable to sign the power of attorney, the notary public may sign the principal’s name on the power of attorney per the following:
A notary public must make reasonable accommodations to persons with disabilities, including:
· reading the entire document to someone who is blind before notarizing;
· let person sign with a mark if the document is:
o witnessed by two disinterested persons;
o notary prints the person’s first and last name; and
o notary prints the words, “his (or her) mark” below the person’s signature mark
709.2106. Validity of Power of Attorney.
(3) Out-of-State POAs. If power of attorney was executed in another state, it will be honored in Florida if the power of attorney was signed in compliance with the other state’s laws. But a third person may seek the opinion of counsel as to its validity, at the expense of the principal. The third person has no liability for rejecting a power of attorney if such legal opinion is not provided by the principal (only with regard to out-of-state powers of attorney described in this section).
(5) Copies Just as Good as the Original. Unless prohibited by the actual power of attorney document, a photocopy or electronic copy of an original power of attorney has the same effect as the original.
709.2108. When Power of Attorney is Effective.
(1) A power of attorney can be used immediately after it is properly executed (signed).
(2) Springing Powers of Attorney are only valid if they were executed prior to October 1, 2011 if it is accompanied by the affidavit of a principal’s primary treating doctor stating that the principal lacks the capacity to manage property.
(3) Springing Power of Attorneys signed after October 1, 2011 are invalid (except for a military power of attorney), if the document provides that it only becomes effective at some future date or contingent upon some future event (i.e. no more springing powers of attorney, they can all be used immediately after properly executed).
- Elder Law Attorney Comment: Many Medicaid-planning clients express a desire for a springing power of authority. We can discuss virtual springing documents in more detail at our consultation. However, there is a very practical purpose in not having a springing power of attorney, especially in a medicaid-planning context. This being - time is not on the medicaid applicant’s side, especially when a medical crisis strikes. Requiring a doctor to sign an affidavit confirming the principal’s incapacity added an extra layer of bureaucracy, another reason for banks and other institutions to closely scrutinize and delay (or deny) honoring the power of attorney. All this additional delay and confusion does not benefit the incapacitated elder who needs things done in short order. This is one reason why the Florida legislature eliminated springing powers of attorney.
709.2109. Termination or Suspension of Power of Attorney / Agent’s Authority.
(1) Power of attorney terminates when:
(a) the principal dies;
(b) the principal becomes incapacitated (unless the power of attorney is durable);
(c) the principal is adjudicated totally/partially incapacitated by a court, unless the court determines that certain authority granted by the power of attorney is to be exercisable by the agent;
(d) the principal revokes the power of attorney;
(e) the POA provides that it terminates;
(f) the purpose of the POA is accomplished; or
(g) the agent’s authority terminates and the POA does not provide for a co-agent or successor agent.
(2) An agent’s authority terminates when:
(a) agent dies, becomes incapacitated, resigns or is removed by a court;
(b) action is filed for divorce of marriage if agent is spouse (unless power of attorney specifically provides otherwise)
(c) power of attorney otherwise terminates.
(3) If any person initiates judicial proceedings to determine the principal’s incapacity or for the appointment of a guardian advocate, the power of attorney is suspended until the petition is dismissed, withdrawn, or court enters an order authorizing agent to exercise one or more powers granted under the power of attorney. BUT, if the agent named in the power of attorney is the principal’s spouse, child, or grandchild, the authority is not suspended unless a verified motion is also filed (see Fla. Stat. 744.3203) alleging that
· the agent’s decisions are not in accord with the alleged incapacitated person’s known desires;
· that the power of attorney is invalid;
· that the agent has failed to discharge their duties (or illness/incapacity makes the agent incapable of doing so);
· that the agent has abused their power
(4) The agent must have knowledge that their power has been revoked or their actions (in good faith) will continue to bind the principal.
709.2110. Revocation of Power of Attorney. A new power of attorney does not revoke an old one unless it specifically indicates this wish. Any writing, signed by principal, may be used to revoke any power of attorney.
709.2111. Co-Agents and Successor Agents.
(1) A principal may designate two or more people to be “co-agents.” These co-agents can exercise the authority granted by the power of attorney independently (separately and without consulting the other) unless the power of authority document states otherwise.
(2) Successor agents may be designated should the original agent resign, become incapacitated, die, decline to serve or is otherwise not qualified to serve (otherwise the successor agent has no power….this is the differentiating feature compared to the authority of a co-agent). Unless the document states otherwise, the successor agent can do everything the original agent could do.
(3) Except as otherwise provided in the power of attorney document, or subsection (4) below, an agent is not liable for the actions or another agent unless they participated or helped conceal a breach of the other agent’s fiduciary duty.
(4) If any agent has actual knowledge of a breach or imminent breach of fiduciary duty by any other agent, including a predecessor agent, must take reasonable action to protect the the principal’s best interests. If the agent fails to take action as required by this subsection, they are liable to the principal for reasonably foreseeable damages that could have been avoided if the agent had taken such reasonably-protective action.
(5) A successor agent does not have a duty to review the actions of a predecessor agent (unless there is actual knowledge as described in subsection (4) above).
(6) Banking Exception. Even if a power of attorney requires that two or more people act together as co-agents (i.e. consult with one another and both sign documents, etc..), one agent may delegate to a co-agent the authority to conduct banking transactions as provided in Fla. Stat. 709.2208(1).
709.2112. Agent Reimbursement and Compensation. Unless the power of attorney says otherwise, agents can be reimbursed for expenses reasonably incurred on behalf of principal and are entitled to reasonable compensation. Only qualified agents (spouse, heir, financial institutions with trust powers, attorney or CPA (licensed in Florida) or a Florida resident who has never been an agent for more than three principals at the same time) may be compensated.
709.2114. Duties of Agent under Power of Attorney. The agent is a fiduciary and may only act with good faith and within the scope of authority granted in the power of attorney. The agent may not act contrary to the principal’s reasonable expectations actually known by the agent.
The agent must attempt to preserve the principal’s estate plan, to the extent actually known by the agent, if preserving the plan is consistent with the principal’s best interest based on all relevant factors, including: (a) value and nature of principal’s property; (b) the principal’s foreseeable obligations and need for maintenance; (c) minimization of taxes; (d) eligibility for a benefit, program or assistance; and (e) the principal’s personal history of making gifts.
- Elder Law Attorney Comment: In my opinion, Florida Statutes section 709.2114(1)(a)(4)(a)-(e) mean that proper Medicaid planning by an experienced Elder Law attorney is almost an obligation of an agent acting in their principal’s best interests should long-term care be imminent.
(1)(b) Agents may not delegate their authority to a third person (i.e. no agents of agents to act on behalf of the original principal).
(c) Agents must keep records of all receipts, disbursement and transactions made on behalf of the principal and (d) must maintain an accurate inventory each time the agent accesses the principal’s safe-deposit box (if principal specifically authorized the agent to access the box in the power-of-attorney).
709.2114(2): Unless specifically provided in the power of attorney document, agents must:
(a) act loyally for the sole benefit of the principal;
(b) not act in a way that would create a conflict of interest (no self dealing);
(d) cooperate with persons who have authority to make healthcare decisions in order to carry out the principal’s reasonable expectations to the extent actually known by the agent and, otherwise, act in their best interest.
- Elder Law Attorney Comment: This section (Fla. Stat. 709.2114(2)(a)-(d)) highlights the reason why almost all form power of attorney documents purchased on the internet or even many that are drafted by highly-competent estate-planning attorneys, are insufficient for Medicaid-planning needs of elder law clients. Some highly-effective Medicaid-planning and asset-preservation strategies require agents (usually trusted family members of the incapacitated principal) to self deal or purposefully enter into transactions that would usually be viewed as a conflict of interest.
(3) Agents are not liable to any beneficiary of the principal’s estate plan for failure to preserve the plan - if the agent has acted in good faith.
709.2115. Exoneration of Agent. The power of attorney may provide that the agent is not liable for any acts or decisions made by the agent in good faith. (1) But the liability-relieving provision may not allow the agent to act dishonestly, with bad motive, or reckless indifference to the purpose of the power of attorney or best interest of the principal. (2) The liability-relieving provision will not be effective if it can be shown it was inserted as the result of an abuse of the relationship to the principal.
709.2116. Judicial Relief | Conflicts of Interest. Courts may review agent’s conduct, terminate agent’s authority to act or enforce a power of attorney.
(3) If a third party unreasonably fails to honor an agent’s attempt to act pursuant to the power of attorney, that third party will be liable for attorney's fees and costs.
(4) If the principal (or someone acting on behalf of the principal) challenges an agent’s exercise of power of attorney on conflict-of-interest grounds (and evidence shows that agent had a personal interest in the exercise of power), the agent then has the burden of proving, by clear and convincing evidence, that the agent acted:
- Solely in the principal’s best interest; or
- In good faith in the principal’s best interest and that the conflict of interest was expressly authorized in the power of attorney.
- See ELDER LAW COMMENT ABOVE for Fla. Stat. 709.2114(2)(a)-(d). Again a form power of attorney document just won't do. Ask us about how our Enhanced Durable Power of Attorney is different.
709.2119. Acceptance and Reliance on the Power of Attorney. (1)(a) third parties, if acting in good faith, may accept and relay on a power of attorney that appears to be executed properly and the actions the agent (or attorney-in-fact) seeks to take appears to be contemplated within the agent’s authority as specified in the power of attorney document.
(2) A third person may require the agent to provide an affidavit stating in which state the principal resides, that the principal has not died, that there has not been a revocation of the power of attorney, that there has been no suspension of power of attorney (such as the commencement of a guardianship proceeding); and if the agent seeking to take action under the POA is a successor agent, to state why the predecessor agents are no longer available.
(2)(c) provides a form for the affidavit contemplated in 709.2119(2)(b):
STATE OF FLORIDA
Before me, the undersigned authority, personally appeared (agent) (“Affiant”), who swore or affirmed that:
1. Affiant is the agent named in the Power of Attorney executed by (principal) (“Principal”) on (date) .
2. This Power of Attorney is currently exercisable by Affiant. The principal is domiciled in (insert name of state, territory, or foreign country) .
3. To the best of Affiant’s knowledge after diligent search and inquiry:
a. The Principal is not deceased;
b. Affiant’s authority has not been suspended by initiation of proceedings to determine incapacity or to appoint a guardian or a guardian advocate;
c. Affiant’s authority has not been terminated by the filing of an action for dissolution or annulment of Affiant’s marriage to the principal, or their legal separation; and
d. There has been no revocation, or partial or complete termination, of the power of attorney or of Affiant’s authority.
4. Affiant is acting within the scope of authority granted in the power of attorney.
5. Affiant is the successor to (insert name of predecessor agent) , who has resigned, died, become incapacitated, is no longer qualified to serve, has declined to serve as agent, or is otherwise unable to act, if applicable.
6. Affiant agrees not to exercise any powers granted by the Power of Attorney if Affiant attains knowledge that the power of attorney has been revoked, has been partially or completely terminated or suspended, or is no longer valid because of the death or adjudication of incapacity of the Principal.
Sworn to (or affirmed) and subscribed before me this day of (month) , (year) , by (name of person making statement)
(Signature of Notary Public-State of Florida)
(Print, Type, or Stamp Commissioned Name of Notary Public)
Personally Known OR Produced Identification
(Type of Identification Produced)
(3)(b) A third party may also request an opinion from an attorney from the agent if the third party provides a written explanation of the request.
(5) Third parties who rely on the power of attorney are held harmless by the principal, principal’s estate, beneficiaries for any loss suffered as a result of the actions taken before notice of revocation is provided.
709.2120. Effect of Rejecting a Power of Attorney. Third parties must accept or reject a power of attorney within a reasonable time.
(1)(a) and (b): Four days, excluding Saturdays, Sundays and legal holidays, are reasonable for financial institutions. If the agent is attempting to make a banking or investment transaction on behalf of the principal, the power of attorney must specifically authorize the agent to make such transactions per Fla. Stat. 709.2208(1) and (2) below.
- Elder Law Attorney Note: Yet another reason why many generic form power of attorney documents found on the internet may be insufficient to properly execute our Medicaid-planning strategies.
(2) It is actually inappropriate for third parties to require a different or additional power of attorney if the authority to conduct the transaction in question is already specifically authorized by the power of attorney presented to the third party (e.g. sometimes banks will say they need the principal to sign a power of attorney form drafted by the bank’s lawyer, this is not allowed if the ability to conduct banking transaction is already provided for in an otherwise valid power of attorney presented).
(3) If a third party is rejecting a power of attorney must state the reason for so doing in writing.
(5) If a third party rejects a power of authority in violation of the statute, they will be liable for damages, including attorneys fees and costs in an action to confirm the validity of the power of attorney.
709.2201. Authority of Agent in Power of Attorney. The power of attorney document cannot simply state “I give my agent authority to do everything the principal can do.” That is not specific enough. The agent can only do what is very specifically authorized in the power of attorney document.
(2)(a)-(c). If specifically authorized in the document, a POA can authorize agent to buy and sell stocks, convey mortgage homestead property (but must get joinder of principal’s spouse if married). If the agent is the spouse, spouse can join in conveyance of homestead property in their capacity as agent - if authorized to do so. POA can also be used to make all healthcare decisions on behalf of the principal, including but not limited to those set forth in Chapter 765 (this is the Florida Statute that deals with Advanced Directives). See my summary of Florida Statutes Chapter 765 on Health Care Advanced Directives here.
(3) Agent may never: execute contract that requires the personal services of the principal, make affidavit as to the personal knowledge of the principal, vote in any public election on behalf of the principal, execute or revoke any will or codicil for the principal, exercise powers and authority granted to the principal as trustee or court-appointed fiduciary.
709.2202. When Principal Must Initial or Sign Next to Specific Items In Order For Agent to be Able to Act on Them.
(1)(a). To create an inter vivos trust.
(1)(b). To amend or revoke a trust (created by or on behalf of the principal), but only if the trust document specifically authorizes amendments or revocations by the settlor’s agent.
(1)(c). To make a gift, subject to subsection (4), below.
(1)(d). Create or change rights of survivorship.
(1)(e). Create or change a beneficiary designation.
(1)(f). Waive principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit retirement plan.
(1)(g). Disclaim property and powers of appointment.
(3) Unless the power of attorney specifically authorizes, an agent must be a parent, grandparent, spouse, or child to provide the agent (or someone the agent owes a legal support obligation) an interest in the principal’s property (e.g. gift, right of survivorship, beneficiary designation, disclaimer).
(4) Unless the power of attorney document specifically authorizes otherwise, if there is a provision for the general authority of the agent to make gifts, this statute limits that power to only:
- Make gifts in an amount not to exceed the annual dollar limits of the federal gift tax exclusion under 26 USC 2503(b).
709.2208. To Authorize Banking and Financial Institution Transactions.
(1) Banking. Power of Attorney document should include the statement: “Agent has authority to conduct banking transactions as provided in section 709.2208(1), Florida Statutes.” This statement will provide general authority for the agent to engage in the following transactions with banks and financial institutions without any other specific language in the document:
- Establish, modify, terminate account.
- Contract for services from a financial institution, such as renting a safe-deposit box or vault space.
- With draw, by check, order, EFT or otherwise, money or property in the custody of the financial institution.
- To receive statements.
- Purchase checks / cashier checks / money orders
- Endorse and negotiate checks, transfer money.
- Apply for and use debit cards
- Draw on line of credits already established.
(2) Investments. (i.e. stocks, bonds, mutual funds, insurance contracts and all other kinds of financial instruments). Power of Attorney document should include the following statement: “Agent has authority to conduct investment transactions as provided in section 709.2208(2), Florida Statutes.” This statement will provide general authority for the agent to engage in the following transactions with respect to securities and broker-dealers to take the following action without any additional specificity in the document:
- buy/sell investments
- establish/terminate accounts with respect to investment instruments
- Pledge investment instruments as collateral/security.