What is a Durable Power of Attorney?
A regular power of attorney expires upon the signor’s incapacitation. A durable power of attorney continues upon a patient being deemed incapacitated and is one of several essential incapacity planning documents. But elder law and Medicaid planning go one step further with an Enhanced General Durable Power of Attorney. Planning for incapacity requires much more authority than what general estate planning attorneys usually provide for in their forms. This is one of the largest differences between estate planning attorneys and elder law attorneys and Medicaid planning lawyers. Medicaid planning lawyers or elder law attorneys are primarily focused on our client’s lifetime needs, while also considering what happens to our client’s assets after they pass and how best to protect their spouse and/or heirs. It is important to emphasize that I am not casting dispersions on estate planning attorneys. What they draft accomplishes the goals for which they were retained. But when a client comes to an elder-law or Medicaid-planning attorney, these documents will often need to be amended to accomplish a different set of goals: mainly to address some very specific lifetime needs related to health care costs, Medicaid qualification, VA benefits and the ability to conduct transactions that will allow someone who is incapacitated to obtain those benefits.
Think of Power of Attorney as a voluntary delegation of rights, as opposed to an involuntary delegation of rights that come with the guardianship process. Power is the operative word. We want to provide you or your loved one with the power to choose the person or people who can make decisions when you or your loved one cannot make decisions for you/him/herself. It is important to remember that the person signing the power of attorney is not giving away control – that person is simply delegating rights to another person.
Enforcement Rights of Power of Attorney
Banks have to give specific reasons why they are not honoring a valid power of attorney. There are now procedures for expedited court proceedings escalate the issue to correct 3rd party’s mistake. They can be on the hook for attorney’s fees, costs, and damages. See Florida Statutes.
What if I don’t have anyone I trust to name as my agent in a power of attorney document?
This is a much tougher situation. However, there are geriatric care managers who can assist for a fee. Voluntary Guardianship is another alternative. Guardianship is a time-consuming process. The only benefit to going through guardianship over power-of-attorney is that there is court supervision.
Watch Out For This Nursing Home Trick: Agents and Principal walk into a nursing home. Nursing home admissions put stacks of paper in front of agent who signs all of them - including a form that includes guarantee of payment language. Power-of-attorney law specifically states that the agent/attorney-in-fact is not liable personally for signing on behalf of principal. But, the agent needs to be careful that, when signing documents (especially those guaranteeing payment to a nursing home) that they sign and indicate on the actual signature line that they are signing as agent or attorney in fact.
Our enhanced durable power of attorney documents makes sure to indicate that agent is only able to sign in a representative capacity.
Different Types of Power of Attorney
Durable Power of Attorney
This is the type of power of attorney necessary for incapacity planning because it is the only type of power of attorney that does not end upon the grantor (principal) becoming incapacitated. Not all durable powers of attorney are created equally, the law requires certain powers to be very specifically spelled out, otherwise, 3rd parties may not accept them. This is why it is very important to speak with a medicaid-planning lawyer or elder law attorney, who has experience crafting the types of powers an elder wishes a trusted family member or professional to be able to carry out upon their becoming incapacitated. This ensures that their wishes are met and that the agent is not hamstringed by the very document that is supposed to empower.
Springing Power of Attorney
In 2011, the Florida legislature made springing powers of attorney illegal. (a springing power of attorney is one that becomes usable only upon the principal becoming incapacitated).
So, in Florida, all powers of attorney become effective immediately after they are signed with the proper formalities (signed by the principal, with two witnesses) in front of a notary.
Limited Power of Attorney
This is usually reserved for single use purposes (sometimes referred to as a "special power of attorney"). When you trade in a car, you will sign a limited power of attorney that the dealership will use to interact with the state and transfer title to the car in your stead. When you buy or sell a home you may give your lawyer a limited power of attorney to sign only the particular real estate documents in your name. A limited power of attorney might be used to let one person made deposits or withdrawals from one particular bank account, they can be tailored almost infinitely. Limited powers of attorney will usually expire once the single transaction has occurred or upon a certain date. These are not suitable for elder law purposes as there are often many different transactions that need to be done either prior to or after the elder becomes incapacitated.
General Power of Attorney
This type of power of attorney provides the agent, or attorney-in-fact, to conduct a broad array of legal acts on behalf of the principal. However, those acts must still be specifically listed in the power of attorney document. In this way, the name "general power of attorney" is a bit of a misnomer. It is usually not useful for elder law and medicaid planning attorney purposes as the types of transactions necessary for medicaid planning will not be included in most general power of attorney forms. In addition, any power of attorney that is not "durable" will become invalid upon the principal becoming incapacitated.
Health Care Power of Attorney
Appoint an agent to make health care decisions for you, if you are unable to do so yourself. Healthcare power of attorney is discussed in more detail here.
Power of Attorney - FAQs
Does Signing Power of Attorney Mean I Lose Control?
No, for example, if you provide your adult child with the power of attorney to conduct banking transaction on your behalf (e.g. withdraw money to pay your bills), that does not mean you lose the ability to access your money from the bank. The bank will still deal with you as the account holder. In fact, in the right hands, a power of attorney is incredibly empowering. Especially when an elder becomes incapacitated, a properly drafted durable power of attorney can help preserve a higher quality of life for the elder. Otherwise, without a properly elder law attorney drafted power of attorney, a time consuming and expensive guardianship process may be necessary in order to conduct transactions that benefit the incapacitated elder.
What if I change my mind?
Powers of attorney can be revoked at any time the principal. The principal needs to send written language to banks and other third parties notifying them of the power of attorney revocation.
Can My Agent Steal From Me?
Yes. but not without consequences. But there is a risk that the person you provide a power of attorney will take advantage of the situation. In the example above, if the agent has authority to access your bank account, there is a risk that they withdraw money for nefarious purposes. It is incredibly important to only give power of attorney to someone you trust. If you do not have someone you trust, as discussed above, professionals (e.g. geriatric care managers) are available to assist. It should be noted that agents under a power of attorney are held to a fiduciary standard and if they are found to be stealing or otherwise not acting in the principal's best interests as contemplated under the power of attorney, there are various civil and criminal consequences.
Summary of Florida Power of Attorney Statute (Florida Statutes 709.2101 - 709.2402)