A power of attorney (POA) is a powerful form of estate planning that grants broad power to a person you choose, called an agent. The agent is granted control of your assets on your behalf if you're unable to control them yourself. Florida Power of Attorney rules changed in 2011 legislation. If you had a POA created before this time, it's still valid, but you may want to consult with an attorney if you need to make any changes to your POA.
In my opinion, the POA is the most important document in your estate plan.
For example, an agent may:
- Control your investments
- Pay your monthly bills
- Maintain your real estate
- Create trusts to care for your children
- Apply for government benefits
- And more (or less) depending on what you want (or don’t want) your agent to be able to do.
Anyone can benefit from a POA, and it's encouraged that anyone who is estate planning sign a POA. You may also want to sign a POA if you're elderly or in bad health.
If you're retiring, diagnosed with a major health issue, or want to plan your estate now while you're fully cognizant and able to, a Power of Attorney is a must-have.
9 Reasons to Discuss a Florida Power of Attorney With Your Estate Planning Lawyer
1. Choose a Trusted Person to Make Medical Decisions on Your Behalf
If you're unable to make your own medical decisions, you can grant a POA to a trusted family member, loved one, or spouse to make decisions on your health care. The agent will not be able to make medical decisions on your behalf if you are able to communicate your wishes.
A POA is your chance to allow someone to act in your best interest when you're unable to make decisions on your own.
Health care decisions can also be delegated through a Florida Health Care Surrogate Designation.
2. Choose an Agent to Handle Your Financial and Legal Matters
Financial and family problems often occur when someone's estate isn't properly planned. A POA will allow an agent to handle all financial and legal matters of an incapacitated individual. But, be aware that a durable power of attorney is not a one-size-fits-all document. You cannot just say "my agent can do everything on my behalf...."
Instead, you have to specifically designate what your agent can or cannot do. If the power is not specifically mentioned (and in some cases initialed, such as with the creation of trusts), then the agent will NOT be able to act. Poorly written Florida POAs are the cause of much frustration.
3. You Have Assets You Want to Protect
Do you have an estate? An estate can include:
- Savings accounts
- Real estate
If you have assets, bank accounts, retirement accounts, or real estate, a POA can ensure that these assets are protected if you're incapacitated. This may mean giving access to your checking account to pay your mortgage or to make vital estate planning decisions. When you become incapacitated, Medicaid planning may be needed to help pay for home health care, ALF care, or nursing-home care.
4. You Operate a Business
Your business interests don't go away when you're unable to make decisions on your own. Keeping your business operating or choosing what to do with your business can be the responsibility of your chosen agent.
The agent can act on your behalf, unless business agreements say otherwise, to ensure that your business interests are protected.
5. Avoid Guardianship or Conservatorship Issues
You'll be able to choose the person appointed to be a guardian or conservator if you draft a POA. Otherwise, the issue will go to the court and someone else will petition the court for the guardian to be appointed. Guardianship can usually be avoided when a well-drafted durable power of attorney has been signed in advance of becoming incapacitated.
6. Protects Against Financial Abuse Claims
A comprehensive estate plan will prevent the risk of financial abuse claims against the agent chosen. A POA can be extensive, and allow for gifts to be issued and proper asset protection plans to be carried out.
If an extensive POA is in place, this allows for:
- Protection against financial abuse claims
- Asset protection plan goals to be met
7. Allows for Asset Protection
Asset protection delays can occur if there isn't an agent in place. When drafted properly, a POA will allow an agent to protect your assets. If a POA isn't drafted properly, the agent may not have the power to protect certain assets, leading to significant financial loss.
Proper planning will ensure that all of your assets are properly protected. As an example, without a properly-drafted durable power of attorney, Florida Medicaid-planning becomes impossible (or requires an expensive and time-consuming guardianship).
8. Ensures Financial Responsibilities are Met
Bills will continue piling up, and interest, penalties, and repossession can occur. An agent can use assets to pay bills, such as a mortgage, to ensure that you can maintain your lifestyle.
9. Provides Peace of Mind
You'll be able to choose an agent that you know and trust. If you don't have a power of attorney and you're incapacitated, someone you don't choose will have control over the decisions of your estate.
As your life circumstances change or an estate grows, it's important to update your POA.
A power of attorney is one of the estate planning measures you need to have an estate planning attorney to help you with. It's crucial to have your power of attorney set up properly — free forms should never be used.
"A power of attorney is an important and powerful legal document, as it is the authority for someone to act in someone else's legal capacity. It should be drawn by a lawyer to meet the person's specific circumstances. Pre-printed forms may fail to provide the protection desired," states The Florida Bar.
Can a Bank Reject my Durable Power of Attorney?
I was recently approached by someone who was concerned because her elderly father was no longer capable of making his own decisions. Before coming to me, he had executed a valid durable power of attorney – naming his daughter as his agent (attorney-in-fact). Her specific concern was concerning her father’s bank refusing to honor the power of attorney document, frustrating her attempt to handle her father’s financial affairs.
Was the power of attorney properly executed?
First, I noted that the power of attorney document was validly executed per Florida Statutes Section 709.21405 (i.e. signed by the principal in the presence of two witnesses before a notary). My client indicated that she could not find the original document and wondered if that was causing the bank to reject the document. I pointed out that Section 709.2106(5) of Florida Statutes, indicates that copies are just as good and effective as the original power of attorney document.
Next, I determined that the power of attorney had not been revoked and that it was durable.
Is the power of attorney durable?
Generally, power of attorney documents become invalid once the principal becomes incapacitated. But Florida Statutes, section 709.2104 indicates that a power of attorney is “durable” (which means will survive the principal becoming incapacitated) 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.
I checked the power of attorney document and, indeed, the appropriate language was in place making the POA durable.
What if my power of attorney is rejected?
Florida Statutes, Sec. 709.2119 and 709.2120 provide steps a bank may take to ensure the reliability of the power of attorney document presented to them and consequences for their failure to accept and honor a valid POA document. In fact, on all my durable power of attorney documents, I place the following provision in bold:
- Notice to all who receive a request from this Power of Attorney: You must timely accept this Durable Power of Attorney or face potential liability for unreasonably refusing to honor it pursuant to Florida Statute 709.2120. If you deny the attorney-in-fact’s request, you must state your reason in writing and provide that to the attorney-in-fact pursuant to Florida Statute 709.2120(1)(a). You have the right to request an opinion of counsel from the attorney-in-fact pursuant to Florida Statute 709.2119(3)(b) upon your providing a written explanation of the reason for the request.
Fla. Stat. 709.2119 (From Florida Power of Attorney Act)
This section deals with acceptance and reliance on the power of attorney. If the agent/attorney-in-fact presents a document that seems valid and properly executed and the request is specifically contemplated in the power of attorney document, third parties (e.g. in this case the financial institution) may accept and rely on the document with impunity. The bank may require the agent to provide an affidavit explaining that the principal has not died or revoked/suspended the power of attorney, etc… (a form affidavit is provided for
in Sec. 709.2119(2)(b)).
Fla. Stat. 709.2120 (From Florida Power of Attorney Statute)
This section instructs on potential consequences for failing to honor a valid power of attorney. It indicates that banks, and other financial institutions, must accept or reject a power of attorney within four days (excluding weekends and legal holidays).
The bank may not require that their power-of-attorney form be used if the one presented to them is valid and contains proper authority for the agent/attorney-in-fact to conduct banking transactions.
709.2120(5) indicates that if a valid power of attorney document is rejected, the bank will be liable for damages, including attorney’s fees and costs in an action to confirm the validity of the power of attorney.
How an elder law attorney can help if a bank rejects a valid POA
After I was retained I faxed some materials to the local bank branch that had rejected the POA (cover letter, copy of Florida Power of Attorney Act, with the certain section highlighted, and the previously-rejected power of attorney document). I then called and spoke with the manager. I asked them to conference in their legal counsel. When I was told that this was not possible at the moment, I demanded that they send the documents I already faxed to them back to the bank’s legal department. I explained that there was no legal justification for failing to honor the power of attorney. I then explained the legal consequences – that we would have to initiate an emergency guardianship proceeding, which would likely get expensive – and that they would be liable for forcing my client to engage in this expensive and unnecessary proceeding.
The manager agreed to promptly send my package to their legal department for reconsideration.
After a few days, I received a phone call that the bank had changed its position and would honor the power of attorney.
Many Powers of Attorney Forms Do Not Accomplish Medicaid Planning Goals
A client may come into my office proudly showing an old power of attorney document put together by their estate planning attorney a decade ago (or even worse: a form document they purchased online) and believe they are covered. What many fail to realize is that the durable power of attorney is a one-size-fits-all document. A durable power of attorney that works for estate-planning purposes will likely not work for your elder law attorney who needs a more powerful document for Medicaid-planning purposes. The reason is: there are certain actions, unique to Medicaid planning, which are often not contemplated by your estate planning attorney (or the form you downloaded off the internet for $150.00). If
these actions are not specifically authorized in the power of attorney document, they cannot be done by the attorney-in-fact. In short: some durable power of attorney documents are all but useless for qualifying our clients for Medicaid.
How to Handle Sibling Disputes Over a Power of Attorney
A power of attorney allows someone to appoint another person -- an "attorney-in-fact" or “agent” -- to act in place of him or her -- the “principal” -- if the principal ever becomes incapacitated. There are two types of powers of attorney: financial and medical. Financial powers of attorney usually include the right to open bank accounts, withdraw funds from bank accounts, trade stock, pay bills, and cash checks. They could also include the right to give gifts. Medical powers of attorney allow the agent to make health care decisions. In all of these tasks, the agent is required to act in the best interests of the principal. The power of attorney document explains the specific duties of the agent.
When a parent names only one child to be the agent under a power of attorney, it can cause bad feelings and distrust. If you are dealing with a sibling who has been named agent under a power of attorney or if you have been named agent under a power of attorney over your siblings, the following are some things to keep in mind:
- Right to information. Your parent doesn't have to tell you whom he or she chose as the agent. Besides, the agent under the power of attorney isn't required to provide information about the parent to other family members.
- Access to the parent. An agent under a financial power of attorney should not have the right to bar a sibling from seeing their parent. A medical power of attorney may give the agent the right to prevent access to a parent if the agent believes the visit would be detrimental to the parent's health.
- Revoking a power of attorney. As long as the parent is competent, he or she can revoke a power of attorney at any time for any reason. The parent should put the revocation in writing and inform the old agent.
- Removing an agent under power of attorney. Once a parent is no longer competent, he or she cannot revoke the power of attorney. If the agent is acting improperly, family members can file a petition in court challenging the agent. If the court finds the agent is not acting in the principal's best interest, the court can revoke the power of attorney and appoint a guardian.
- The power of attorney ends at death. If the principal under the power of attorney dies, the agent no longer has any power over the principal's estate. The court will need to appoint an executor or personal representative to manage the decedent's property.
If you are drafting a power of attorney document and want to avoid the potential for conflicts, there are some options. You can name co-agents in the document. You need to be careful how this is worded or it could cause more problems. The best way to name two co-agents is to let the agents act separately. Another option is to steer clear of family members and name a professional fiduciary.
Sibling disputes over how to provide care or where a parent will live can escalate into a guardianship battle that can cost the family thousands of dollars. Drafting a formal sibling agreement (also called a family care agreement) is a way to give guidance to the agent under the power of attorney and provide for consequences if the agreement isn't followed. Even if you don't draft a formal agreement, openly talking about the areas of potential disagreement can help. If necessary, a mediator can help families agree on care.
To determine the best way for your family to provide care, consult with your attorney.
Concerns about Durable Power of Attorney: Loss of Control
No doubt about it: a durable power of attorney can be a dangerous document. In the wrong hands, it would be easy for the agent/attorney-in-fact to literally steal. This concern is valid and durable powers of attorney should only be signed in favor of a trusted family member or
confidante. But, the power of attorney document has some protections built-in:
1. There are criminal penalties for abuse of a power of attorney.
2. There are civil remedies that can be brought against the wrongdoer.
3. While our client remains competent, they can revoke the power at any time.
- Revocation must be mailed to the agent (via a method that requires signed receipt) and should be provided to all institutions or third parties who may be relying on the POA.
Remember, If you don’t pick someone, a judge and court may be required to choose someone. In the right hands, a durable power of attorney is an empowering tool because you control who you believe has your best interests at heart and who will be able to act on your behalf when you are no longer able to do so.
POA: Minimizing Need for Guardianship
Guardianship plays an important role and can be highly beneficial when judicial oversight is desired, but usually, it takes a long time and is expensive. Most of the time guardianship is a necessary evil that most would prefer to avoid.
A client (or more likely, their family), with severe dementia and unable to understand what is going on around them, may visit an elder law attorney, hoping to get their loved one on Medicaid to pay for their nursing home. If they have not done prior Medicaid planning – our options will be significantly more limited. In this situation, usually, a guardianship proceeding is necessary.
If a client comes to me of sound mind, alert and oriented, and therefore with the capacity to sign their own documents, I remind them why they are in my office – meeting with a Medicaid attorney: to hope for the best, but plan for the worst – a time when you cannot make decisions for yourself. This is difficult to think about, but an important conversation to have nonetheless. We want to put the client in a position where if they lose the ability to make decisions for themselves, that their lifetime wishes, and what is best for them and their families can proceed unhindered.
After Signing a Durable Power of Attorney and Health Care Surrogate Documents
You’re being responsible. You are addressing a fact of life that many prefer to ignore: there may come a time when you are incapable of making your own decisions (or will need help with certain transactions). Congratulations for recognizing that these are important issues and that it is far better for you to decide who to empower to make important decisions on your behalf, rather than having a court decide.
This article is for those who have already met with their estate planning lawyer or elder care attorney to sign a durable power of attorney and a collection of incapacity planning documents sometimes referred to as advanced directives: health care surrogate designation, living will, and health care power of attorney.
What To Do Once a Durable Power of Attorney and Health Care Surrogate Designation have been properly signed
The elder law or estate planning attorney has likely just given you a stack of documents, or perhaps placed them in a very official and important looking binder.
I like to tell my clients that all of these documents are only good if the institutions and facilities recognize and accept them! Some estate planning attorneys are great at drafting advanced directives and powers of attorney, but make it seem as if their effect is immediate and third parties will not give you any trouble. Theoretically, this should be true. A properly drafted, executed and notarized durable power of attorney should be honored by third-parties immediately. Practically, I often find that this is not the case.
Oftentimes, there may be a waiting period while the durable power of attorney or health care surrogate designation is reviewed by an institution’s legal counsel.
My goal is to give you practical advice on how to avoid delays or barriers to your documents being accepted.
What to do with the Durable Power of Attorney After It has been executed?
I wrote another article that explains how an elder law attorney can help if a bank or other institution rejects a power of attorney. But, especially with my clients who are executing these documents in advance of needing to utilize them, I try to counsel my clients on what to do with a durable power of attorney immediately after it is signed in order to avoid confusion and frustration down the line.
The advice is rather simple: After a power of attorney has been properly executed, provide a copy to every entity that you want to honor the document. This includes (but is not limited to): banks, investment brokerages, retirement account holders, mortgage companies, etc… some financial institutions have their own power of attorney forms they will want to be signed and attached to the power of attorney you signed with your lawyer. Then they will have the POA reviewed by their in-house attorneys to be approved.
But once it’s approved and in your file, your agent/attorney-in-fact will have no problems making decisions on your behalf down the line.
- As a corollary to this advice: Keep in mind that if you ever decide to withdraw, revoke or change who you named as agent under a POA, you will have to notify the same organizations of the power of attorney revocation (or they may continue to honor it despite your intent to the contrary).
What to do with the Health Care Surrogate Designation After It has been fully signed?
A health care surrogate and health care power of attorney are simply documents that allow you to designate who can make health-care related decisions for you. After a healthcare surrogate designation has been properly signed, my advice is similar to the above.
Make sure your physicians and local hospitals have copies of your health care surrogate designation on file in advance. This is because you don’t want your health care surrogate wasting time arguing with medical personnel if an important decision needs to be made. Place the advanced directives in your medical file now so your health care surrogate will be empowered to assist you later, in your time of need.
In our office, we create very powerful advanced directives by combining the health care surrogate designation, health care power of attorney and living will in one combined document. This has the very practical effect of letting hospital administrators and physicians know (without having to check multiple documents), who is in charge during a health care crisis, especially if you, the patient, are unresponsive or incapable of making health decisions for yourself.
Does the Florida Durable Power of Attorney Accomplish Your Goals?
In another article, I explain common problems with the power of attorney documents. Essentially there is no "one size fits all" durable power of attorney and I see very practical problems with free forms circulating the internet.
At the end of the day, the durable power of attorney and health care surrogate designation are two of the most important and powerful documents a lawyer can draft. But they provide limited benefits if they are not well written or just sit in a home safe or bookshelf. It can be immensely frustrating when institutions put up roadblocks, preventing the effective use of these documents.
By placing the well-drafted power of attorney or health care advanced directive in the hands of the very organizations that you want to honor them, in advance, you can prevent a huge future headache.
Does the person I choose in my POA have to live in Florida?
No. You can empower anyone you so desire to serve as your agent or attorney-in-fact under a Florida Durable Power of Attorney. However, there are certainly practical reasons why someone local would make more sense than someone out of state. Sometimes, quick decisions need to be made - and if your key decision maker lives far away, this can be difficult.
That being said, the person(s) you select as your agents under a POA has to be trusted. If you only trust someone outside of Florida to make important decisions then that person is the best choice.
Is Your Old Florida Power of Attorney Form Problematic?
You’re going to think I’m trying to sell you something.
I’m not…. I promise I have legitimate legal concerns.
Don’t be surprised if, during our elder law / Medicaid planning consultation, I inform you that the durable power of attorney you had done by another lawyer, who doesn’t practice elder law (or heaven forbid a free Florida durable power of attorney template you downloaded off the internet) is no good for Florida Medicaid long-term care planning purposes.
I don’t have to redo powers of attorney all the time, but when I do, I can tell the potential client is thinking that I’m just trying to do unnecessary work to pad my fee.
I’m not…. I promise I have legitimate legal concerns.
By the end of this article, I hope that you’ll better understand why it is sometimes absolutely necessary to update your durable power of attorney.
There is No Such Thing as a “General” Durable Power of Attorney
I have many clients (or more often children of clients) who bring a power of attorney document and confidently state, “don’t worry, I have a general power of attorney that lets me do everything and anything as if I were a mom.” A general, or all-encompassing durable power of attorney, doesn’t exist anymore (not since the Florida Power of Attorney Act became law in October 2011).
What Changed in 2011 for Florida Durable Power of Attorneys?
In 2011, Florida adopted the Florida Power of Attorney Act (starting at Florida Statutes 709.2101) which brought Florida in-line with the 47 other states that have adopted a Uniform Power of Attorney Act - allowing properly executed durable power of attorney forms to cross state lines. So now, if a power of attorney was executed in another state, and it was valid in that state, 3rd parties in Florida are supposed to honor that document.
In addition, the Florida Power of Attorney Act set forth some additional requirements.
No General Power of Attorney in Florida
As mentioned above, specificity is now required. There is no such thing as a general durable power of attorney that says, “my agent can do everything I could do…” or words to that effect. While POAs signed before October 2011 are still valid, still makes practical sense to have one updated if the principal has the capacity to sign (at least during a lucid interval).
Certain Florida Power of Attorney Provisions Must be Individually Initialed
This is the part that has me advising a new Florida Durable Power of Attorney. I see many non-elder law attorneys using an old pre-2011 power of attorney form where nothing is initialed.
I see the same thing on POA template forms downloaded off the internet.
Another power of attorney template I’m seeing is one that has the principal initial next to a box that says something to the effect of: “initialing here [on this one line] has the same effect as if I initialed on all the lines above.” There is no “all of the above” option allowed under Florida law and I wouldn’t mess around with it.
Which Florida Power of Attorney Provisions have to be Individually Initialed?
The ability to create an inter-vivos trust; the ability to amend existing trusts; the ability to change rights of survivorship; the ability to change beneficiary designations or change rights of survivorship; and more. While other specific powers require separate initials (which you can read all about in Fla. Stat. 709.2202), I only included the one’s above because they impact my clients who come to me for Florida Medicaid long-term care planning (where I can protect someone’s assets and get Medicaid to pay for some or all of their long-term care needs).
Almost every Florida Medicaid planning case I encounter requires the creation of some kind of trust (such as a Medicaid income trust or special needs trust). I cannot create a trust for someone who has lost capacity if their durable power of attorney does not have that specific provision initialed.
So, even if your power of attorney document specifically says, in bolded and capitalized black letters "I AUTHORIZE MY AGENT TO CREATE AN INTER VIVOS TRUST, INCLUDING SPECIFICALLY A QUALIFIED INCOME TRUST," if that provision (or one similar) does not have initials next to it, its INVALID if the durable power of attorney was signed after October 2011.
So when I advise creating a new power of attorney, it’s not because I want you to pay for something that isn't really needed.
I don't…. I promise I have legitimate legal concerns.
Other Common Florida Power of Attorney Deficiencies
When I’m reviewing a durable power of attorney that was drafted by another lawyer or a free template power of attorney, I’m looking for provisions that allow my client’s agent to create irrevocable trusts, qualified income trusts, personal services contracts, deal with real estate (even if it requires “self-dealing” for the agent if that furthers my client’s preexisting estate plan), and that give my client’s agent the ability to apply for public benefits including Medicaid.
Other Florida Power of Attorney Requirements after 2011
- Third parties who refuse to accept your otherwise-valid durable power of attorney must give a written explanation. For banks and other financial institutions, four days is presumed reasonable (for other 3rd parties, circumstances will dictate reasonableness).
- Third parties may require an attorney-in-fact to sign an affidavit affirming that the principal is not dead and that the power of attorney is still in full force and effect.
- But third parties may not require an additional form (many banks still ask that THEIR power of attorney form be filled out, this is inappropriate).
- These third parties can be subject to paying damages and attorney fees that are required to compel banks to accept a valid durable power of attorney.
In addition, springing powers of attorney are no longer effective. In other words, a power of attorney is in effect as soon as it is signed, witnessed, and notarized. If you desire that “springing effect” we can discuss my office holding on to your POA and you can let your family know where it is located when it's needed (i.e. when you lose capacity). The theory being: if your agent doesn’t have the power of attorney document, he or she can’t use it.
The original durable powers of attorneys are no longer mandatory. Third parties must accept copies.
Agents must keep records of transactions made on behalf of the principal. If the power of attorney accesses a safe-deposit box, the agent must provide an inventory each time the box is accessed.
The filing of a petition for dissolution of marriage terminates the authority of an agent who is married to the principal (unless the power of attorney states otherwise).
Final Florida Power of Attorney Thoughts
It's not always strictly legally necessary to update your durable power of attorney. But if the document is old and doesn’t meet post-2011 statutory requirements; I still say that redoing the POA is practically a good idea. Why is it practical if not strictly required?
Here is my reasoning: your power of attorney document is only good if it’s honored and respected by third parties as quickly as possible.
Third parties, including the bank, insurance companies, and government agencies (including DCF if dealing with Florida Medicaid) don’t always understand the law and may cause unnecessary delays or push-back if they don’t know that they are supposed to honor pre-2011 POAs that don’t meet post-2011 POA requirements.
It would be penny-wise and pound-foolish to try to save a few hundred dollars now vs. hiring me (or another Florida elder care lawyer) later to argue with someone who is improperly refusing to honor your old durable power of attorney document.
I’m not looking to do unnecessary work. If your POA form has everything I know is now required or what other institutions are looking for when considering whether to accept and honor the POA, I will not suggest you redo your durable power of attorney.
But if I review an old POA and see any legal deficiency or believe there is a possibility of your current power of attorney coming under unnecessary scrutiny, I’ll suggest formally executed a new Florida durable power of attorney document. When I do, I’ll explain in detail the reasons why.
Don’t think I’m trying to up-sell you!
I’m not…. I promise I have legitimate legal concerns.