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Written by Thomas Upchurch
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.
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.
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:
If the incapacity is long-term or permanent, more significant actions might be required, such as:
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.
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.
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.
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:
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.
“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.
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:
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.