What Does Durable Power Of Attorney Mean In Florida Today?
A durable power of attorney is a legal instrument. It is a document that’s signed by an individual granting power to another person or entity to take actions on behalf of the signee. For example, a power of attorney that says, “My agent can convey real estate,” means that the person you named in that document can sell your house. The addition of the word “durable,” as in the phrase durable power of attorney, is in contrast to a document that doesn’t say durable on it. If it’s just a power of attorney, then the signer’s incapacity would nullify the effectiveness of that document under traditional common law. A power of attorney with the word “durable” means that the document will stay valid whether or not the signer lacks capacity or if they become incapacitated.
A power of attorney will have limited scope whereas a durable power of attorney will have a much wider scope of its usefulness and applicability. A durable power of attorney means that you’re giving somebody the authority to be you financially. The person named in the document can do anything you would do for yourself financially, which includes a slew of potential financial transactions such as banking, paying bills, filing tax returns, and dealing with real estate, estate tax, and long-term care planning. A durable power of attorney is used to avoid costly and stressful court-supervised guardianships, and it is used to give a caregiver the ability to help out a family member. It’s also used as a good preventative planning tool to avoid unwanted guardianship in that you have the decision-makers you want in place versus having a random person or group of family members cited at court to take control of your financials. The creator of the power of attorney has a great deal of power and authority in that document to dictate what his or her trusted person can and can’t do. In the majority of the situations, the durable power of attorney is the correct legal instrument to address your financial needs if you’re unable to meet them.
What Is Springing Power Of Attorney? Is That Still In Effect In Florida? Is There An Alternative Approach?
Under the new October 1st, 2011 law for durable powers of attorney in Florida, springing powers of attorney are no longer effective. A springing power of attorney means that the power of attorney and the powers found in the document are only effective when the signer, also known as the principal, is incapacitated. Prior to the change in the law, if you were to do a springing power of attorney for a family member, and they try to take that document and present it to a bank, the bank would not honor that durable power of attorney because the wording in the document would require the bank to request a proof of incapacity from a doctor. When this requirement was removed, it made things less onerous on families. They no longer had to get that extra doctor’s letter. It absolved the bank from having to inquire further where they could mess up and create liability for themselves. It removed a protection that somebody could retain for themselves, which would be a consumer who did not want this powerful document in the wrong hands at the wrong time when they still wanted to have control over their finances. Nonetheless, the springing power of attorney provision is now no longer valid as of October 1st, 2011.
Now, the absence of a springing power of attorney should not be a deal breaker. For example, in my office, we offer our clients an escrow agreement in which we retain the original documents. In that escrow agreement, there are certain conditions that would allow our law firm to release that durable power of attorney for you. The most common directions our clients implement include releasing the durable power of attorney if we see them incapacitated and their doctor says that they are incapacitated. Or, if they are conversational and alert, and they ask us to release the power of attorney, then we would release it as well. That’s the most effective alternate approach. If you’re interested in a springing power of attorney, and you’re working with our office, that is usually the solution we recommended, but this is something that would be discussed based upon your comfort and preferences.
What Is The Relationship Of Durable Power Of Attorney With Regards To The Other Legal Instruments?
One of the most common points of confusion with consumers is understanding how the durable power of attorney document interplays with all the other similar documents that are customarily produced in an estate plan. Those other documents consist of a will, a living trust if the person wants one, and a designation of health care surrogate. All of these documents name individuals to take power over your assets at certain times during your life, incapacity, and death.
The durable power of attorney controls your individual transactions that relate to you individually. Now, if you created a trust or living trust, and you transfer assets from your individual name into your living trust name, that asset is governed and controlled by the trustee in the living trust document and the terms thereof. If your benefit comes from your asset under your trust, then the trust controls how it’s managed and not the durable power of attorney. The trust controls trust assets, the durable power of attorney controls individual assets. Typically, this will come up in a scenario where a family member is stepping in on behalf of their parents. Their parents create a living trust during their lifetime and put their bank accounts into the trust agreement. The child then wants the authority to write checks and the parents want that as well. In that scenario, a discussion would need to take place about whether to add a child as co-trustee, what that would entail, and whether the person has the capacity and desire to name their child as co-trustee. Now, if the client creates a living trust, and there are no assets titled under the name of the living trust, then the durable power of attorney would control all transactions.
The durable power of attorney manages somebody else’s financials during their lifetime. In contrast, a designation of health care surrogate gives somebody else the authority to manage medical decisions on behalf of another person. So, durable powers of attorney control financials and designation of health care surrogate controls medical decisions. Can both be in the same written document? Yes, and that can be done stylistically, depending on the attorney you’re working with.
Another common misconception that involves the designation of health care surrogate pertains to certain decision-making. Theoretically, the wording of a health care surrogate should not be related to financial matters. It should be related to health matters only. Sometimes, there is a little confusion and discrepancy, especially if you’ve named somebody for medical, which is different than the person named for the financial decision-making.
Lastly, the durable power of attorney, as it relates to a last will and testament, should essentially be two separate things. Upon death, the durable power of attorney no longer works, and if there are assets held in an individual’s name, the last will and testament would then control the management and distribution of that asset. The durable power of attorney, as it relates to all other legal documents and assets, is a point of issue and confusion for a lot of people that come through our office. Accordingly, that is something that requires legal counsel and instruction. That way, everything is managed correctly and according to your loved one’s wishes.
For more information on Durable Power Of Attorney, an initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (904) 398-6100 today.
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