One of the simplest, yet most important aspects of my estate planning practice is advising clients regarding powers of attorney. Oftentimes when people advance in age they become unable to handle their personal business and finances because of competency or other capacity related issues? A power of attorney signed while you are of sound mind may avoid the time, cost and expense of a court appointed guardianship in the event you become incapacitated in the future. A power of attorney is a writing that grants authority to an agent (the person receiving the power of attorney) to act on behalf of the principal (the person giving the power of attorney). An act performed by an agent pursuant to a power of attorney has the same effect as if the principal performed the act.
As of October 1, 2011, the laws governing powers of attorney in Florida were substantially changed in a complete revision of Florida Statute Chapter 709 (the “Act”). The Act applies generally to all powers of attorney, regardless of when they were executed, except as provided in individual sections of the Act.
Certain portions of the law governing powers of attorney remain the same under the Act. For instance, in order for a power of attorney to be effective, it must be signed by the principal and by two subscribing witnesses and be acknowledged by the principal before a notary public. Also, a power of attorney document must specifically enumerate the powers conferred to the agent by the principal. A blanket statement (for example, “to perform all acts the principal could perform”) is insufficient under prior and current Florida law. Furthermore, in order for a power of attorney to be “durable,” that is, to be valid after the principal becomes incompetent, it must specifically say so.
Below is a list of some notable changes to the law under the Act:
- A power of attorney executed in another state, which does not comply with Florida’s formal execution requirements, is valid in Florida if, when the power of attorney was executed, the power of attorney and its execution complied with the law of the state of execution.
- A power of attorney between spouses terminates when a divorce action is filed, unless the power of attorney states otherwise.
- Except as otherwise stated in the power of attorney, a photocopy or electronically transmitted copy of an original power of attorney has the same effect as the original.
- When 2 or more persons are designated to act as co-agents, they may exercise their powers independently, unless the power of attorney provides otherwise. This was not the case prior to the Act.
- An agent may only perform certain acts on behalf of the principal if such acts are specifically enumerated (and initialed) on the power of attorney instrument. Some of these acts include: (i) creating an inter vivos trust or revocable trust; (ii) amending a trust created by or on behalf of the principal; (iii) making a gift; and (iv) creating or changing rights of survivorship designations or beneficiary designations. This specific requirement under the Act does not apply to powers of attorney executed before October 1, 2011.
The above list of changes is only an overview of some of the important changes in the new Act. We suggest you consult with an estate planning attorney to review your existing power-of-attorney to make sure it continues to meet your desires.