Power of Attorney in Florida
In Florida, a power of attorney (POA) is a legally binding agreement between two people – or between a person and another entity – to allow the second person or institution to transact business, legal, property and/or personal affairs for the first person. The individual who creates the document is called the principal. The person or entity granted the power is called the attorney-in-fact, or the agent.
With power of attorney, an agent has full court-sanctioned authority to perform every action enumerated in the POA document. A power of attorney can be broad or specific. It depends on an individual's situation and which aspects of life he or she wishes to have overseen by someone else.
Because an agent can legally act in the principal's stead, it is always important that the agent chosen is someone who can be trusted to carry out the principal's wishes. After a POA agreement is signed, witnessed and notarized, it cannot be amended (although it can be revoked and/or replaced by the principal).
A power of attorney may be used to give an agent the right to:
Sell a home or other personal property
Have access to bank accounts
Sign contracts or legal documents
Create, amend or transfer assets into a trust
Handle tax matters and deal with the IRS
Handle retirement accounts and investments
Make healthcare decisions
Handle miscellaneous financial transactions
In Florida, the agent must be a Florida resident who is 18 years of age or older or must be a financial institution authorized by statute to conduct trust business in the state. The agent can be compensated for reasonable costs and expenses if the agent is the principal's spouse or heir, if the agent is an attorney or certified public accountant licensed in Florida, or if the agent is any other Florida resident who is not in the business of serving as an agent (serving more than three principals).
In addition, a principal can grant a power of attorney to more than one individual, and even further instruct that they act independently of one another, or, conversely, that they must act in concert when it comes to making decisions based on the POA's instructions.
Different Kinds of Powers of Attorney in Florida
Because there are so many variables that can be built into a POA, it's always advisable to have a real attorney – someone who knows Florida's statutes – oversee the drafting of the POA document.
There are several broad categories of POAs, each of which can be tailored to the needs and desires of the principal. A general power of attorney is different from a durable power of attorney, and both are different than a limited power of attorney.
General Power of Attorney (GPOA)
A general power of attorney (GPOA) gives an agent broad powers to perform any of the actions and activities included in the POA document, as long as the agent is fulfilling his or her fiduciary duty to the principal, and performing all actions only for the benefit the principal's estate. A GPOA remains in effect until the principal dies, revokes the power, or is determined by a court of law to be incapacitated, meaning he or she is found to be no longer responsible for making decisions regarding property, assets, benefits, income, etc.
Durable Power of Attorney (DPOA)
A durable power of attorney (DPOA) is an oft-used estate planning tool in Florida not only because of its flexibility and the different ways in which it can be structured, but also because it is durable. That is, it remains effective even if the principal becomes ill, incompetent, or incapacitated (unless a court decides to override the document and appoint a guardian to manage a principal's assets).
The advantage of a DPOA is that in the event of incapacitation, the chosen agent can retain the sweeping authority over the principal's affairs, minimizing disruption to his or her financial life. To achieve this purpose, the law requires that the DPOA document include a statement such as, "This power of attorney shall not be affected by my subsequent disability or incapacity, or by the passage of time."
Limited Power of Attorney (LPOA)
A limited power of attorney (LPOA), sometimes known as a "Special Power of Attorney," gives an agent the authority to conduct a specific act. For example, a principal may grant someone the power to sell a home, or to make his or her healthcare decisions, etc. A Limited Power of Attorney can expire if its purpose is completed or if there is a term limit specified in the document.
An Agent's Duties
In 2011, the Florida legislature passed a new power of attorney statute dividing an agent's duties into two categories: "Mandatory Duties" are duties that apply notwithstanding any contradicting provisions in the power of attorney document. "Default Duties" are duties that apply except as otherwise provided in the power of attorney document.
However, both sets of duties require that an agent must:
Not act contrary to the principal's reasonable expectations and best interests
Attempt to preserve the principal's estate plan
Keep accurate records of all transactions and correspondence made on the principal's behalf
Not delegate his or her authority to a third person
Cooperate with a principal's health care surrogate when necessary and applicable
Not execute or revoke any will or codicil for the principal
Act in good faith at all times