Estate Planning & Powers of Attorney

When you think of estate planning, you probably think about passing money and other property to your loved ones after you pass away. Though wills and living trusts are an important part of your plan, there’s more to a comprehensive estate plan. A durable power of attorney is an important element for most people, and helps to protect both you and your family during your lifetime. 

What is a Power of Attorney (POA)?

A power of attorney, in general terms, is a legal document that grants someone else to act on your behalf. Different types of powers of attorney serve different purposes. For example, a power of attorney for healthcare allows someone you trust to make medical decisions for you if you are unable. A limited power of attorney allows someone to step into your shoes and represent you for a specific purpose, and is generally time-limited. A durable power of attorney can be broad-based or limited to specific powers. 

Florida powers of attorney, including durable powers of attorney, terminate on the death of the principal. 

What’s Different about a Durable Power of Attorney? 

Under Florida law, a durable power of attorney is one that is “not terminated by the principal’s incapacity.” This is a very important distinction, and one that must be made specifically within the document. Otherwise, the power of attorney terminates if the person granting the power becomes incapacitated. This defeats one of the key purposes of a power of attorney, which is to ensure that a trusted person can manage your affairs and make decisions on your behalf if you are unable to do so. 

When you become incapacitated, the world keeps moving. Your bills still have to be paid. Your property still needs to be maintained. It may be necessary to use some of your funds to provide for your care, or to sell property. You may be eligible for government benefits that will help with or cover medical expenses. You won’t be able to attend to those things yourself. And, if you’re incapacitated, you won’t be able to designate someone else to take care of them. 

However, if you have a durable power of attorney, then the person you have chosen to entrust with these tasks can manage things like: 

• Making your mortgage payment and paying other bills
• Making domestic support payments
• Accessing your safe deposit box
• Ensuring that your property is secured, safely stored and maintained while you are unable
• Filing and paying taxes
• Canceling or freezing subscriptions and services you aren’t using during your incapacity
• Applying for government benefits on your behalf
• Negotiating payment with medical providers and interacting with your medical insurance carrier
• Hiring people to assist you, such as a housekeeper or home health aid

If the incapacity is long-term or permanent, more significant actions might be required, such as: 

• Making arrangements for your long-term care
• Selling property you won’t be using anymore, such as your automobile
• Selling or renting out real estate

You can see how important it is to have a trusted person able to attend to this sort of business if you are unable. And, you don’t always have time to prepare for incapacity. It’s common to think that you have plenty of time to make this type of arrangement. But, incapacity can happen suddenly, and can happen at any age. For example, you could become incapacitated due to a serious car accident. 

If you’re unprepared, your loved ones could be left helpless, and may have to obtain a court order to do something as simple as use money in your checking account to pay your rent. That’s why, for most people, a durable power of attorney is an essential part of their estate plan. 

Choosing the Person Who Holds Your Power of Attorney

The importance of a durable power of attorney is clear. But, you’ve likely also noticed that it gives that person a lot of power. While you can pick and choose what authority you give to the person who holds your power of attorney, significant authority is required if they’re to be able to fulfill the purpose of the durable power of attorney.

That means it’s important to choose very carefully.

Who May Serve? 

There are few limits on who can hold your power of attorney in Florida. Generally, any competent person aged 18 or older can serve as your representative. You may also choose to appoint a financial institution. To qualify, the institution must have trust powers, have a place of business in the state of Florida, and be authorized to conduct trust business in the state.

Qualifications and Considerations

Sometimes, the best person to hold your power of attorney is the person closest to you. After all, that person probably knows the most about your affairs, and has the best understanding of what you would want to do. But, don’t default to choosing your brother or best friend just because you’re close or because you think they might be offended if you chose someone else. Instead, consider: 

• Honesty and integrity: you obviously want the person holding your power of attorney to be someone you are comfortable trusting with access to your bank accounts and other property. 
• Reliability: even those with the best of intentions are sometimes just inclined to drop the ball. Make sure the person taking responsibility for your bills and other arrangements has the organizational skills and attention to detail necessary to make sure your affairs are managed responsibly. 
• Appropriate skills: the person holding your power of attorney doesn’t have to be a financial expert, but it’s important to assess what they’ll be asked to do and factor that into your decision. A friend or family member who might be well-qualified to pay your bills and arrange for household assistance may not be the right choice if you have a network of rental properties to manage or complex self-managed investments.

A Florida Durable Power of Attorney is Effective Immediately

You might assume that since your durable power of attorney is intended to ensure that someone can manage your finances and other matters while you are incapacitated, it would only take effect upon incapacity. Once upon a time, that was true–or, at least, an option. But, Florida law specifies that powers of attorney executed on or after October 1, 2011 are effective immediately upon execution.

It’s important to be aware of this because language that attempts to limit the power delegated to a future time period or a triggering event like incapacity won’t just be ineffective–it will invalidate the POA. 

A Durable Power of Attorney is Revocable in Florida

“Durable” means that the power of attorney remains in effect if you become incapacitated. But, that doesn’t mean you can’t change it while you are able. You can revoke a power of attorney at any time, so long as you are competent to do so. This must be done in writing, either independently or as part of a subsequent power of attorney.

Talk to an Experienced Estate Planning Attorney about Your POA

As you can see, there’s a lot to consider when drafting a durable power of attorney, whether as part of a comprehensive estate plan or as a standalone document. The best way to avoid mistakes and ensure that you’ve considered all of the key factors and variables is to work with a Florida estate lawyer who is experienced in drafting durable powers of attorney. 

Your estate planning lawyer can help you make important determinations like: 

• How broad the delegation of power should be to best ensure that your POA can conduct your business while also avoiding unnecessary risk, and
• What considerations are most important in choosing a POA given your specific circumstances. 

Your attorney can also ensure that your power of attorney contains the appropriate language to make sure it remains in effect if you are incapacitated, and that you avoid language that might invalidate the document. 

Attorney Thomas Upchurch has been helping Florida residents with all aspects of estate planning, probate administration and probate and trust litigation for decades. He has the knowledge and experience you need to ensure that your interests and your loved ones are protected, during your lifetime and after you pass away. 

None of us knows when we might need someone to step in temporarily while we’re incapacitated, when someone else may be called upon to make medical decisions for us, or even when we might pass on. The best preparation is early preparation. To learn more about how we can help with your estate plan or other trust and estate issues, schedule a consultation right now. Just call 386-320-6169 or fill out our short contact form to get started.