Florida Powers of Attorney
Florida Powers of Attorney
Unless otherwise specified, the information in this manual applies only to Powers of Attorney signed on or after October 1st of 1995, the effective date of revisions to Florida's Power of Attorney law. Consult a lawyer regarding use and enforceability of Powers of Attorney executed prior to October 1, 1995.
A lawyer can explain the significance of the law regarding Powers of Attorney and how the law affects the responsibilities of an attorney-in-fact. The lawyer can also explain changes or new interpretations of the law that may have been made after this pamphlet was prepared.
This pamphlet is organized in eight parts: (1) About the Power of Attorney; (2) Powers and duties of an Attorney-in-Fact; (3) Using the Power of Attorney; (4) Relationship of the Power of Attorney to other legal instruments; (5) Health care and the Power of Attorney; (6) Termination of the Power of Attorney; (7) Financial management and the liability of an Attorney-in-Fact; and (8) Where to learn more.
About the Power of Attorney
What is a Power of Attorney?
A Power of Attorney is a legal document delegating authority from one person to another granting that person the right to act on behalf of the maker of the Power of Attorney. What authority is granted depends on the specific language of the Power of Attorney. A person giving a Power of Attorney can make it very broad or can limit the Power of Attorney to certain specific acts.
What are some uses of a Power of Attorney?
A Power of Attorney can be used to give another the right to sell a car, home or other property in the place of the maker of the Power of Attorney. A Power of Attorney might be used to allow another to sign a contract for the maker of the Power of Attorney. It can be used to give another the authority to make health care decisions, handle financial transactions, or sign legal documents for the maker of the Power of Attorney. With few exceptions, Powers of Attorney can give others the right to do any legal acts that the makers of the Powers of Attorney could do themselves.
Where can a person obtain a power of attorney?
A person should consult with their lawyer. A power of attorney is an important and powerful legal document. A pre-printed form may not be appropriate, may not provide the protection desired, or may unintentially revoke existing legal documents.
What is a "principal?"
The "principal" (also called the "donor") is the maker of the Power of Attorney -- the person who is delegating authority to another.
What is an "attorney-in-fact?"
The "attorney-in-fact" is the recipient of the Power of Attorney -- the party who is given the power to act on behalf of the principal. An "attorney-in-fact" is sometimes referred to as an "agent," but not all "agents" are "attorneys-in-fact." The term "attorney-in-fact" does not mean the person is a lawyer.
What is a "third-party?"
As used in this pamphlet, a "third-party" is a person or institution with whom the attorney-in-fact has dealings on behalf of the principal. This may be a bank, a doctor, the buyer of property that the attorney-in-fact is selling for the principal, a broker, or anybody else with whom the attorney-in-fact must deal on behalf of the principal.
What is a "Limited Power of Attorney?"
A Power of Attorney can be a "Limited Power of Attorney" which gives the attorney-in-fact authority to conduct a specific act. For example, a person might use a Limited Power of Attorney if they needed to sell a home in another state. The power could be delegated to another person to handle the transaction locally. A Limited Power of Attorney could be "limited" to selling the home or to other specified acts.
What is "General Power of Attorney?"
A "general" Power of Attorney gives the attorney-in-fact very broad powers to perform any legal act on behalf of the principal. When lawyers draft general Powers of Attorney, they often list the types of activities the attorneys-in-fact can perform. The general Power of Attorney usually contains a provision that the attorney-in-fact has the authority to perform any act the principal could do including the items specifically listed. People often obtain general Powers of Attorney to plan for a time when they may not be able to take care of things due to incapacity or otherwise. By executing the general Power of Attorney, they designate someone to handle financial and other matters on their behalf.
What is a "Durable Power of Attorney?"
Limited and general Powers of Attorney granted by a competent principal to another terminate if and when the principal becomes incapacitated. Because many people want Powers of Attorney for the sole purpose of designating someone to act on their behalf if they are no longer able, Florida law provides for a (special) power designated a "Durable Power of Attorney.". It is precisely when a person can no longer act for themselves, as is the case in the event of incapacity, that the Power of Attorney is most valuable. Not only can the attorney-in-fact manage, decide, sign and otherwise act on the principal's behalf, the fact that someone is empowered to "act" for the principal may avoid otherwise necessary guardianship court proceedings. A Durable Power of Attorney remains effective even if a person becomes incapacitated. The item that distinguishes a Durable Power of Attorney from a non-durable Power of Attorney is special wording that provides the power survives incapacity of the principal. However, even a Durable Power of Attorney may be terminated if court proceedings are filed to determine the principal's incapacity ( see Termination of the Power of Attorney). Most Powers of Attorney granted today are durable.
Must a person be competent to sign a Power of Attorney?
Yes. At the time the Power of Attorney is signed, the principal must be competent. The principal must understand what he or she is signing at the time of execution. The principal must understand the effect of a Power of Attorney, to whom they are giving the Power of Attorney, and what property may be affected by the Power of Attorney.
Who may serve as a an attorney-in-fact?
Any competent person 18 years of age or older can serve as an attorney-in-fact. Certain financial institutions can also serve as an attorney-in-fact. There is no course of education that attorneys-in-fact must complete nor any test that attorneys-in-fact must pass prior to their appointment. Because a Power of Attorney is a powerful document, attorneys-in-fact should be chosen for reliability and trustworthiness. In the wrong hands, a Power of Attorney can be a license to steal. It is a big responsibility to serve as an attorney-in-fact.
Powers and Duties of an Attorney-in-Fact
What activities are permitted by an attorney-in-fact?
An attorney-in-fact can perform only those acts specified in the Power of Attorney. Powers of Attorney should be written clearly so that the attorney-in-fact and third parties know exactly what the attorney-in-fact is authorized to do. If you, as an attorney-in-fact, are unsure whether or not you are authorized to do a particular act, you should consult the lawyer who prepared the document or, if that is not possible, other legal counsel.
Can an attorney-in-fact sell the principal's home?
Florida law makes special provision for a person's primary residence or homestead. For example, a person's homestead property is entitled to discounted property taxes, certain immunities from creditor claims and certain protection for the spouse. Unless otherwise stated, a Durable Power of Attorney allows the attorney-in-fact to sell the principal's homestead. To protect the principal's spouse from losing his or her home, however, the attorney-in-fact must obtain the authorization of the spouse in order to sell the principal's homestead. Even though it is not required by law, whenever it is anticipated that the attorney-in-fact may sell real estate for the principal, the power of attorney should (but need not) include the legal description of that property and special language making clear the right of the attorney-in-fact to sell the property.
What activities are prohibited as an attorney-in-fact?
There are a few actions that an attorney-in-fact is prohibited from doing even if the Power of Attorney says otherwise. An attorney-in-fact may not sign a document stating that the principal has knowledge of certain facts. For example, if the principal was a witness to a car accident, the attorney-in-fact could not sign an affidavit stating what the principal saw or heard. An attorney-in-fact may not vote in a public election on behalf of the principal. An attorney-in-fact may not create or revoke a will or codicil for the principal. If the principal was under contract to perform a personal service (i.e., to paint the family portrait or provide care services), the attorney-in-fact is not authorized to do those things in the place of the principal. Likewise, if someone had appointed the principal to be trustee of their trust or if the court appointed the principal to be a guardian or conservator, the attorney-in-fact cannot take over these responsibilities based solely on the authority of' a Power of Attorney. There are few other exceptions.
What are the responsibilities of an attorney-in-fact?
While the Power of Attorney gives the attorney-in-fact authority to act on behalf of the principal, an attorney-in-fact is not obligated to serve. After all, the attorney-in-fact is not required to sign the Power of Attorney and therefore powers may be delegated over matters with which the attorney-in-fact wants no involvement. An attorney-in-fact may have a moral or other obligation to take on the responsibilities associated with the Power of Attorney, but the Power of Attorney does not create an obligation to assume the duties. However, once an attorney-in-fact has accepted the appointment either in writing or by acting under the power, that person is liable for failure to participate in administration of the principal's assets or for failure to attempt to prevent a breach of fiduciary obligations. In other words, once an attorney-in-fact takes on a responsibility, he or she has a duty to act prudently. (See Financial Management and the Liability of an Attorney-in-Fact ).
Is there a certain code of conduct for attorneys-in-fact?
Yes. Attorneys-in-fact must meet a certain standard of care when performing their duties. An attorney-in-fact is looked upon as a "fiduciary" under the law. A fiduciary relationship is one of trust. If the attorney-in-fact violates this trust, the law may punish the attorney-in-fact both civilly (by ordering the payment of restitution and punishment money) and criminally (probation or jail). The standard of care that applies to attorneys-in-fact is discussed under Financial Management and the Liability of an Attorney-in-fact .
Using the Power of Attorney
When is a Durable Power of Attorney effective?
The Durable Power of Attorney is effective as soon as the principal signs it. Florida law does not allow Durable Powers of Attorney to become effective only upon the happening of a future event. For example, a Durable Power of Attorney cannot state that it becomes effective upon the principal's fortieth birthday when the principal is only twenty-nine, or if the principal becomes incapacitated. The law calls such attempts "springing" Powers of Attorney because they only spring into action upon a certain occurrence.
Can a Durable Power of Attorney be effective only if and when the principal becomes incompetent?
No. A Durable Power of Attorney stating that it becomes effective only if and when the principal becomes incompetent is viewed as a "springing" Power of Attorney and is thus invalid in Florida. (See above.)
Must the principal deliver the Power of Attorney to the attorney-in-fact right after signing or can the principal wait until such time as the services of the attorney-in-fact are needed?
The Durable Power of Attorney is effective immediately upon execution. However, because most persons and businesses will not deal with the attorney-in-fact unless the attorney-in-fact can provide the Power of Attorney document, the usage of the Power of Attorney may effectively be delayed until it is delivered to the attorney-in-fact. The principal may hold the Power of Attorney document until such time as help is needed and then give it to the attorney-in-fact. Often times, the lawyer can fulfill this important role. For example, the principal can leave the Power of Attorney with the lawyer who prepared it, telling that lawyer to deliver it to the attorney-in-fact under the conditions authorized by the principal. Since the lawyer may not know if and when the principal is incapacitated, it is often good practice to let the attorney-in-fact know that the lawyer has the signed document and will deliver it as directed.
How does the attorney-in-fact initiate decision making authority under the power of attorney?
After being certain that the Power of Attorney gives the attorney-in-fact the authority to act, the Power of Attorney (or a copy) should be taken to the third-party (the bank or other institution, or person with whom you need to deal). Some third-parties may ask the attorney-in-fact to sign a document stating that the attorney-in-fact is acting properly. The attorney-in-fact may wish to consult with the lawyer prior to signing it. The third party should accept the Power of Attorney and allow the attorney-in-fact to act for the principal. The an attorney-in-fact should always make it clear that the attorney-in-fact is signing documents on behalf of the principal.
How should the attorney-in-fact sign when acting as an attorney-in-fact?
The attorney-in-fact will always want it to be clear from the signature that they are not signing for themselves but instead, signing for the principal. If the attorney-in-fact only signs their own name, they may be held personally accountable for whatever was signed. As long as the signature clearly conveys that they are signing in a representative capacity and not signing personally, the attorney-in-fact is protected. Though lengthy, it is therefore best to sign as follows:
Howard Rourk, as attorney-in-fact for Ellsworth Toohey.
In this example, Howard Rourk is the attorney-in-fact, and Ellsworth Toohey is the principal.
What if the third party will not accept the Power of Attorney?
Call your lawyer. For a number of reasons, third-parties are sometimes hesitant to honor Powers of Attorney. (See below). Still, so long as the Power of Attorney was lawfully executed and so long as it has not been terminated, third parties may be forced to honor the document. Due to changes in the law, Durable Powers of Attorney executed on or after October 1, 1995, have more clout, but an older document may be enforced as well. Under some circumstances, if the third party's refusal to honor the Durable Power of Attorney causes damage, the third party may be liable for those damages and even attorneys' fees and court costs. Even mere delay may cause damage and this too may be actionable. It is reasonable, however, for the third party to have the time to consult with their lawyer about the Power of Attorney. Banks will often fax the Power of Attorney to their legal department for approval. There comes a time, of course, when delay becomes unreasonable. Upon refusal or an unreasonable delay, call your lawyer.
Why do third parties sometimes refuse Powers of Attorney?
To third parties, the Power of Attorney you have shown them is nothing more than a piece of paper with writing on it. They do not know if it was executed properly or forged. They do not know if it has been revoked. They do not know if the principal was competent at the time the Power of Attorney was signed. They do not know whether the principal has died. Third parties do not want the liability if anything goes wrong. Some third parties refuse to honor Powers of Attorney because they believe they are protecting the principal from possible unscrupulous conduct. Refusal is more common with older ("stale") Powers of Attorney. If your Power of Attorney is refused, talk to your attorney.
What if a third party requires the attorney-in-fact to sign an affidavit prior to honoring the power of attorney?
An affidavit is a sworn written statement. A third party may require the attorney-in-fact to sign an affidavit stating that they are validly exercising the authority under the Power of Attorney. If the attorney-in-fact wants to use the Durable Power of Attorney, the attorney-in-fact may need to sign the affidavit if so requested by the third party. The purpose of the affidavit is to relieve the third party of liability for accepting an invalid Durable Power of Attorney. As long as the statements in the affidavit are true at that time, the attorney-in-fact may sign it. The attorney-in-fact may wish to consult with their lawyer prior to signing it.
May the attorney-in-fact employ others to assist them?
The attorney-in-fact may hire accountants, lawyers, brokers or other professionals to help them with their duties, but can never delegate their responsibility as attorney-in-fact. The Power of Attorney was given by the principal and the attorney-in-fact does not have the right to transfer that power to anyone else.
Relationship of Power of Attorney to other Legal Instruments
What is the difference between an attorney-in-fact and an executor or personal representative?
An executor, termed a "personal representative" in Florida, is the person who takes care of another's estate after that person dies. An attorney-in-fact can only take care of a person's affairs while they are alive. A personal representative is named in a person's will and can only be appointed after a court proceeding called "probate."
What is the difference between a "trustee" and an "attorney-in-fact"?
Like a power of attorney, a trust may authorize certain people to act for the maker of the trust during the maker's lifetime. Like an attorney-in-fact, the trustee may manage the financial affairs of the maker of the trust and act in the place of the maker. A trustee only has power over an asset that is owned by the trust. In contrast, an attorney-in-fact may have authority over all of the principal's assets (except trust assets). Another important distinction is that a trustee may continue acting for the maker of the trust after the maker of the trust dies. In contrast, the Power of Attorney expires upon the death of the principal.
What if the principal has a "guardian" appointed by the courts?
Guardians may be appointed by the courts for people who no longer can act in their own best interest. A person who has a guardian appointed by the courts may not be able to lawfully execute a Power of Attorney. If an attorney-in-fact discovers that a guardian has been appointed prior to the date the principal signed the Power of Attorney, the attorney-in-fact should advise their lawyer. If a guardianship court proceeding is begun after the Durable Power of Attorney was signed by the principal, the authority of the attorney-in-fact is automatically suspended until the court decides whether the Power of Attorney should remain in force. The law requires that an attorney-in-fact receive notice of the guardianship proceeding. If a guardian is appointed, the Power of Attorney is no longer effective unless the court allows certain powers to continue. If the attorney-in-fact finds out about guardianship or incapacity proceedings being initiated, they should consult with their lawyer.
Can a Power of Attorney avoid the need for guardianship?
By law, the courts must look to any alternatives to guardianship. If the alleged incapacitated person executed a valid Durable Power of Attorney prior to his or her incapacity, it may not be necessary for the court to appoint a guardian since the attorney-in-fact already has the authority to act for the principal. As long as the attorney-in-fact has all necessary powers, it may not be necessary to file guardianship proceedings and, even when filed, guardianship may be averted by showing the court that such a power exists.
Health Care and the Power of Attorney
What is the relationship between a Declaration of Living Will and a Power of Attorney?
A declaration of living will specifies a person's wishes as to the provision or termination of medical procedures when the person is diagnosed with a terminal condition. A living will and a health care surrogate designation are termed "health care advance directives" because they are made in advance of incapacity and need. If a person is unable to understand or unable to communicate with their doctors, their living will is a legally enforceable method of making sure their wishes are still honored. Whether or not a person has a living will, their attorney-in-fact may make health care decisions for them if the Durable Power of Attorney specifically gives this right.
What is a Health Care Surrogate Designation and how does it differ from a Power of Attorney?
A Health Care Surrogate Designation is a document in which the maker designates someone else to make health care decisions if they are unable to make those decisions themselves. Unlike a Power of Attorney, a health care surrogate decision-maker has no authority to act until such time as two doctors have determined the principal cannot act for themselves to make informed health care decisions. Many medical providers prefer a designation of health care surrogate for health care decisions because the document is limited to health care. If you foresee making health care decisions for the principal of your Power of Attorney, you should consult with your lawyer.
What if there is a Health Care Surrogate Designation giving somebody else the authority to make health care decisions for the principal and a Power of Attorney giving the attorney-in-fact authority to make health care decisions for the principal?
If there is conflict between a Health Care Surrogate Designation and a Power of Attorney, the Health Care Surrogate Designation will control. An exception to this general rule of law is if a later executed Power of Attorney expressly cancels the Health Care Surrogate Designation.
Termination of the Power of Attorney
When does the Durable Power of Attorney terminate?
The authority of the attorney-in-fact of a Durable Power of Attorney automatically ends when one of three things happen: (1) The principal dies; (2) the principal revokes the Power of Attorney; or (3) when a court determines that the principal is totally or partially incapacitated and does not specifically state that the Power of Attorney is to remain in force. If any one of these three things occur, the Durable Power of Attorney is terminated. If, after having knowledge of any of these events, a person continues to act as attorney-in-fact, they are acting without authority.
What is the procedure for a principal to revoke a Power of Attorney?
Written notice must be sent by mail which requires a signed receipt or by certain approved methods of personal delivery to the attorney-in-fact and to any other party who might rely on the power. Special rules exist for serving notice of revocation to banks and other financial institutions. Consult with your lawyer to be sure these procedures are followed.
When does a general Power of Attorney terminate?
In addition to the three events detailed above, a general (non-durable) Power of Attorney terminates when the principal becomes incompetent. Whether a principal is incompetent or not is sometimes hard to tell. If a person has a general Power of Attorney and they suspect or believe the principal to be incompetent, they should consult with their lawyer before exercising any further powers.
What happens when the principal wants to revoke the Power of Attorney but is incompetent and not acting wisely?
Consult a lawyer. People who are suffering from a mental infirmity such as Alzheimer's Disease or some other form of dementia sometimes make decisions that are not in their own best interest. An incompetent person cannot validly revoke the Power of Attorney. However, it is not for the attorney-in-fact to decide whether the principal is competent or not. It may be necessary to have the courts appoint a guardian for the principal. A lawyer can advise you as to the proper course of action.
Court proceedings were filed to appoint a guardian for the principal or to determine whether the principal is incapacitated. How does this affect the Power of Attorney?
If a court proceeding to determine the principal's incapacity has been filed or if someone is seeking to appoint a guardian for the principal, the Durable Power of Attorney is automatically suspended and an attorney-in-fact must not continue to act. The power to make health care decisions is not suspended and is not taken away unless the court specifically does so. To summarize: If incapacity or guardianship proceedings are begun, all powers are suspended except the right to make health care decisions for the principal. Those may be suspended or terminated if the court so decides.
Authority as attorney-in-fact has been suspended because guardianship proceedings are pending for the principal. Now there is an emergency but there is no guardian and no attorney-in-fact to do something. What now?
The attorney-in-fact may ask the court for special permission to take care of the emergency even though the Power of Attorney remains otherwise suspended. Contact your lawyer.
Financial Management and the Liability of an Attorney-in-Fact
What is "fiduciary responsibility?"
An attorney-in-fact is a fiduciary and as such has a duty to invest and manage the assets of the principal as a prudent investor. This standard requires the attorney-in-fact to exercise reasonable care and caution in managing the assets of the principal. The attorney-in-fact must apply this standard to the overall investments and not to one specific asset. If an attorney-in-fact possesses special financial skills or expertise, he or she has an obligation to use those skills. The attorney-in-fact should keep careful records. Everything the attorney-in-fact does for the principal should be written down, and the attorney-in-fact should keep all receipts and copies of all correspondence, and consider logging phone calls so if the attorney-in-fact is questioned, records are available.
Where to Learn More
Florida Department of Elder Affairs: The DOEA is a helpful resource on a variety of issues relating to aging. The general jurisdiction, mission and purposes of the Department are found in Chapter 430 of the Florida Statutes. The DOEA maintains the elder Helpline, a statewide toll-free number, 1-800-96ELDER, as well as a web site located at http://fcn.state.fl.us/doea/doea.html . The Department also cosponsors publication of the Older Floridians Handbook .
Florida Statutes: Chapter 709 of the Florida Statutes contains the full statutory law on Powers of Attorney. Chapter 744 deals with guardianship. Chapter 518 deals with investment of fiduciary funds. You may find a set of the Florida Statutes at your public library or at most courthouses. You may access the Florida Statutes on the World Wide Web at http://www.leg.state.fl.us/citizen/documents/statutes/index.html
AFFIDAVIT OF ATTORNEY IN FACT
STATE OF FLORIDA
Before me, the undersigned authority, personally appeared ____________ ("Affiant"), who swore or affirmed that:
1. Affiant is the attorney in fact named in the Durable Power of Attorney executed by _______________ ("Principal") on ________________.
2. To the best of Affiant's knowledge after diligent search and inquiry: (a) The principal is not deceased, has not been adjudicated incapacitated, and has not revoked, partially or completely terminated, or suspended the Durable Power of Attorney referenced above; and (b) A petition to determine incapacity of or to appoint a guardian for the Principal is not now pending.
3. Affiant agrees not to exercise any powers granted by the Durable Power of Attorney if Affiant attains knowledge that it has been revoked, partially or completely terminated, suspended, or is no longer valid because of the death or adjudication of incapacity of the Principal.
Sworn to (or affirmed) and subscribed before me this _____ day of __________by Affiant who is personally known to me or who produced ___________________ as identification.
This affidavit was prepared pursuant to Section 709.08(4), Florida Statutes (1995).
The material in this pamphlet represents general legal advice. Since the law is continually changing, some provisions in this pamphlet may be out of date. It is always best to consult an attorney about your legal rights and responsibilities regarding your particular case.