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A Florida power of attorney (POA) allows one person to designate authority to another. This authority generally falls into one of two categories: financial or health care.
Granting power of attorney to someone you trust can provide important protections in the event that you are unable to attend to your own affairs. However, there are risks associated with delegating authority, particularly over your financial affairs. Thus, it is important that you fully understand the ramifications of a POA and choose the type of instrument that both suits your purposes and protects your interests.
Healthcare and financial POAs are most commonly used to ensure that someone you trust has decision-making power and the ability to keep important aspects of your life running smoothly if you should become incapacitated or otherwise unable to attend to your own affairs. Another type of POA, known as a limited power of attorney, may be used for a specific purpose, such as to allow another person to stand in for you at a real estate closing when you are selling property out of state and cannot be present.
A health care power of attorney may be used alone or in combination with an advance directive that provides instructions for your health care should you be unable to make your own decisions or to communicate those decisions to medical providers. When the need arises, you may not be in a position to convey your wishes. Creating a health care POA in advance helps to ensure that someone you trust and who knows you and your priorities will be able to make decisions about your medical are when you are unable.
A financial POA may be general or may be granted for specific purposes. One common example of a limited financial POA involves authorizing another person to write checks on your account. This type of limited POA is often used to allow a family member to pay bills on behalf of an elderly relative. A general financial power of attorney allows the designee to manage a variety of financial affairs, including investments, the purchase and sale of property, and more.
Like a health care POA, a financial power of attorney can provide important protections in the event that a person becomes incapacitated or unavailable. Although the need for this type of POA may not be as immediately obvious as the need for a health care POA, consider how many financial transactions are required to keep day-to-day life running smoothly. For example, a person who becomes incapacitated for a period of months without a POA or some other similar protection could lose his home, car, and other secured property simply because no one had the authority to use his funds to make the regular installment payments on those loans.
Of course, there are risks associated with granting another person the legal authority to act on your behalf. Unfortunately, even close relatives have been known to abuse power of attorney, converting funds for their own benefit, or simply handling accounts negligently.
While there are remedies available when a power of attorney has been abused, such as a lawsuit by the owner of the property or a person appointed to represent his or her interests, it may be difficult or impossible to recover diverted funds. The best protection is careful planning with the assistance of an experienced estate planning attorney.
It may seem a simple matter to download a form and create a power of attorney, but using a template may have unintended consequences. When you create a POA, it is important to understand exactly what rights you are granting to another person, what remedies are available to you should problems arise, under what circumstances the POA is applicable, and how it may be terminated.
The best source of this information is an experienced estate planning lawyer. When you’re ready to take the important step of ensuring that your health and your finances are protected in the event that you cannot manage them yourself, make sure you’re fully informed.
You can take the first step right now by filling out the form at the bottom of this page or calling 386-320-6169 to schedule a consultation.