Durable Power of Attorney
Specifically authorized by Florida Statutes, a Durable Power of Attorney (“DPOA”) is one of the most important legal documents a person (known as the “Principal”) may create for their lifetime legal planning. Under a DPOA, one or more persons known as an “Agent” or “Attorney-in-Fact” are appointed by the Principal and granted broad and general powers within the document to act on behalf of the Principal. By statute, a DPOA expressly survives the incapacity of the Principal, and serves as a cost effective, convenient legal, financial management, and planning tool for the Principal’s lifetime. The powers and authorities granted to an Agent under a DPOA apply to the Principal’s current and after acquired assets, and the authorized actions taken by an Agent under a DPOA bind the Principal and the Principal’s successors in interest. Use of a DPOA by an Agent for a Principal no longer able to manage the Principal’s own affairs is a less restrictive alternative to a court-ordered and court-supervised guardianship of the property over the Principal. If, however, a formal filing is made for a legal determination of the incapacity of the Principal by the Circuit Court in conjunction with a guardianship proceeding, then the authority of the Agent to act thereafter under an otherwise valid DPOA may be suspended in certain instances, pending further hearing and discretion of the court. A DPOA always terminates upon the Principal’s death, and also may be terminated earlier upon its revocation by the Principal, in accordance with its own terms (i.e., an expiration date), and otherwise as provided by Florida law.
Capacity to create a Durable Power of Attorney: A Principal cannot create a DPOA unless he/she has a level of understanding of the broad and general powers that are being granted to the Agent. If the individual proposed to grant the DPOA to the Agent in fact does not have the requisite mental capacity to enter into a contract, then a DPOA may not be granted, and a formal filing for a legal incapacity determination and guardianship of the property in Circuit Court, Probate Division, may be required.
Does a Durable Power of Attorney need witnesses or a notary? A DPOA must be signed by the Principal and by two witnesses to the Principal’s signature, and a notary must acknowledge the Principal’s signature for the DPOA to be properly executed and valid under Florida law. If the Principal has mental capacity, but not the physical ability to sign, then the Principal may direct the notary to sign for the Principal. There are exceptions for military Powers of Attorney and for DPOAs created under the laws of another state.
Powers typically granted: When broadly and correctly drafted and executed in compliance with Florida law, the DPOA may authorize the Agent to exercise, among other things, expanded gift powers, expanded trust and trust modification powers, the power to provide for rights of survivorship, the naming of beneficiaries effective upon the Principal’s death, waiver of benefits under a joint and survivor annuity or retirement plan, and planning for eligibility and applying for government and public assistance benefits to reduce the Principal’s out-of-pocket cost of long term care and health care needs.
Other designations and authorizations: In addition to DPOAs covered by the Florida Power of Attorney Act (“Florida POA Act”), consumers may often grant and sign specific governmental power of attorneys or designated representative authorizations on promulgated, standardized forms, which are not covered by the Florida POA Act. Examples include IRS Form 2848, FDOR Form DR-835, FDMVHS Form HSMV 82053, and FDCF Form CF-ES 2505. In addition, service members of the United States Armed Forces often execute general or specific military powers of attorney, including deployment contingent powers of attorney, which are authorized and governed by federal law, and which accordingly are given effect by Florida courts, as confirmed by the Florida POA Act.
Limitations on the use of a Durable Power of Attorney: The Agent under a valid DPOA would never have the authority to perform duties under a contract requiring the exercise of personal services of the Principal. Examples of their limited authority include the ability to appear and perform for a professional athlete, signing an affidavit made to the “personal knowledge” of the Principal, voting in a public election for the Principal, signing or revoking a Last Will and Testament or a Codicil for the Principal, or exercising power or authority granted to the Principal as a trustee or court-appointed fiduciary (e.g., where the Principal is serving as someone else’s legal Guardian). The Principal may specifically limit powers and authorities granted to the Agent under a DPOA to fit the Principal’s specific planning goals. In addition, a Principal with mental capacity may revoke or amend a previously granted DPOA at any time.
Agent’s liability as a fiduciary: The Agent has responsibilities as a “fiduciary” and is required to account to the Principal for the Agent’s exercise of the DPOA. An Agent should never act against the best interests of the Principal, even if the Principal becomes incapacitated. Because of the fact that DPOAs usually are very broad in scope, and do not terminate with the Principal’s incapacity, they are prone to misuse and abuse by unscrupulous Agents. As such, the Florida POA Act allows for a civil action against an Agent for breach of fiduciary duty. If the Principal is a vulnerable adult (an elderly or disabled person impaired due to a mental, emotional, sensory, long-term physical or developmental disability or brain damage), an Agent who causes a misappropriation, sale or transfer of the Principal’s property may be criminally prosecuted for a felony. Despite the potential for liability exposure to the Agent, DPOAs remain a very popular, flexible, and affordable legal tool to be used for addressing a Principal’s lifetime planning needs.
What is the role of my Elder Law Attorney in creating a Durable Power of Attorney? Elder Law Attorneys have specific experience in drafting and enforcing DPOAs. An Elder Law Attorney should be familiar with the significant changes to Florida POA Act and related Florida law which have occurred in the last four (4) years. If the DPOA is not drafted in accordance with the changes in the Florida POA Act, your DPOA may be an ineffective, if not defective, legal planning tool. For example, the current statute no longer allows for a “springing POA” (which only takes effect if you become incapacitated). Old DPOA’s are “grandfathered in” but a DPOA signed after October 1, 2011, can no longer have “springing” language in it. Additionally, it is presumed that all DPOA’s are “executory” in nature, meaning, the powers and authorities granted to the Agent are effective immediately upon the Principal’s signing of the DPOA. Given all the changes to the statute, it is imperative that your DPOA be in compliance, otherwise, it may be considered defective and not meet the objective of avoiding guardianship.
Can I use a form off the internet? One should be careful about using forms found on the Internet. The form may not meet specific legal and technical requirements of the current Florida POA Act. You certainly don’t want a situation where the legitimacy of your DPOA form is questioned after it is too late to make changes.
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Authority: S. 117.05(14); Chapter 709, Part II, ss. 709.2101 – 709.2402; and Chapter 825, ss. 825.101, 825.102, 825.103 – 825.106, Florida Statutes (2015). 10 U.S.C. s. 1044b.
Authored by Grady Williams
Reviewed by Laurie Ohall