Understanding Durable Power Of Attorney
A form of legal document, a power of attorney (POA) authorizes an agent or attorney-in-fact to conduct business and make a variety of decisions on behalf of an individual known as the principal, who creates and signs the power of attorney in order to deputize this attorney-in-fact to assist in, or in some cases to assume the responsibility for, the management of the principal’s affairs. A durable power of attorney can be an extremely flexible, useful, and highly customizable tool for meeting a variety of estate planning needs. In order to use this tool as effectively as possible, individuals considering whether to include a durable power of attorney in their own estate plans may benefit from a careful overview of what this document is and how it works. Each state has its own laws and procedures regarding the formation of powers of attorney, so it can be a good idea to consult with an estate planning attorney in your jurisdiction to determine the rules that apply to your specific situation. Florida residents are invited to call Loughlin Law, P.A. to discuss their estate planning concerns. Reach our Boca Raton office today at 561-677-8384, or book your consultation online.
What Does “Durable” Mean in a Power of Attorney?
Powers of attorney can be “durable” or non-durable. Like most other states, Florida considers a power of attorney to be “durable” if it is designed not to expire in the event that the principal becomes incapacitated. However, while some states make durable powers of attorney the norm, or default presumption – meaning that all powers of attorney executed in those states will be presumed to be durable unless otherwise specified – in Florida it is durability that requires an explicit provision. Fla. Rev. Stat. (2024) § 709.2104 presents the statutory language that will ensure a power of attorney executed in the state remains in effect even if the principal becomes incapacitated through illness or accident.
What Is the Difference Between Power of Attorney and Durable Power of Attorney in Florida?
Because powers of attorney are not durable in Florida unless they contain the statutory provision outlined in § 709.2104, Floridians may be somewhat more likely than residents of states that treat durability as the presumptive case to draft and execute non-durable powers of attorney. These documents can be highly useful in their own right under the appropriate set of circumstances, but they have some obvious limitations for estate planning purposes.
What Are the Limitations of a Durable Power of Attorney in Florida?
Florida law establishes, under § 709.2202 Fla. Rev. Stat. (2024), a set of powers which are excluded from the scope of an agent’s authority unless the principal separately signs or initials each provision enumerated. Similarly, § 709.2201 sets out a broad range of areas in which the agent named in a power of attorney is presumed to be authorized to act on the principal’s behalf in the absence of an explicit exclusion. Both sets apply equally to durable and non-durable powers of attorney, so the difference marked out in § 709.2104 is the only technical distinction between these two types of powers of attorney in terms of the scope of authority when active. There are, however, some practical considerations that can lead an individual to choose a durable vs. non-durable power of attorney for specific uses.
Non-Durable Power of Attorney Uses
Non-durable powers of attorney are commonly used when their principal wants or needs someone else to manage financial matters on their behalf – potentially for an extended period of time, but not necessarily indefinitely or without regard to the various circumstances that may arise. Generally speaking, the power of attorney is used when the matters involved (or those the principal anticipates) are too complex to be readily handled by simply granting another individual access to a checking or savings account.
A financial power of attorney may be useful when carrying out the necessary transactions will require assuming contractual obligations on the principal’s behalf, and the agent therefore needs clear legal authorization to act in the principal’s place in agreeing to the contract terms, not simply by withdrawing and delivering, or receiving and depositing, the funds specified as payment. If the principal has reason to expect that the circumstances that lead them to consider delegating this kind of authority will be short-lived, it may make sense to create a power of attorney without including the durability clause that would keep the POA in effect even if and when the principal suffers incapacity.
What Is the Most Powerful Power of Attorney?
Owing to the fact that it will not automatically expire in the event of the principal’s incapacity, a durable power of attorney has more wide-ranging uses in long-term care planning than does its non-durable counterpart. Some states utilize a specialized type of durable power of attorney, called a “medical” power of attorney, to nominate a “proxy” for making decisions related to an individual’s medical treatment if the patient is unconscious or otherwise unable to assess critical medical information and give (or withdraw) informed consent on their own behalf. Florida uses a similar document, but refers to it as a “designation of health care surrogate,” with the suggested form for making such designations outlined in § 765.203 Fla. Rev. Stat. (2024), as part of the state’s chapter on Health Care Advance Directives, so while individuals preparing their estate plans in Florida may certainly wish to designate proxies to make their healthcare decisions in case the need arises, in general residents of the Sunshine State can think of their powers of attorney in terms of their present and future financial considerations.
Durable Power of Attorney Uses
Unlike a healthcare proxy designation, which usually remains dormant as long as the individual who created the document as part of their advance care planning is alert and able to make their own decisions, a durable financial power of attorney is “active” as soon as the document is executed, unless the principal includes in the document a “springing” provision which holds the power of attorney in abeyance until a date listed in the document or until a specific set of conditions, outlined in the document, has been met. Unlike a non-durable power of attorney, however, the durable version allows for the principal to work with their agent to develop and implement a plan for continuity in the management of the principal’s financial affairs, such that the agent has a chance to become familiar with the principal’s banking habits, investment portfolios, retirement accounts, and other such concerns – including the minutiae of the principal’s estate plan. Most substantial changes to the principal’s estate planning documents, however, fall in the category of powers that are not granted via a power of attorney document except via specific, explicit inclusion, pursuant to § 709.2202. An estate planning attorney with Loughlin Law, P.A. may be able to help you determine whether these explicit inclusions are essential to meet your estate planning goals.
What Are the Disadvantages of a Durable Power of Attorney?
The most obvious potential disadvantage of a durable power of attorney is the risk that the agent’s authority might be misused. Such misuse could, but need not, be intentional; in some situations, even a well-meaning individual who held substantial power over the principal’s affairs could cause considerable financial damage and numerous administrative headaches through inexperience or ineptitude. While Florida law does provide some recourse for concerned friends and family to seek judicial review of an attorney-in-fact’s conduct if they suspect the power of attorney is not acting in the principal’s best interests, Fla. Rev. Stat. (2024) § 709.2115 establishes broad protections for the agents designated in powers of attorney, shielding them from personal liability under most circumstances as long as they act “in good faith” – regardless of the outcome.
These protections are important to ensure that individuals are willing to accept the weighty responsibility that falls upon the shoulders of an attorney-in-fact, but this same immense responsibility makes it crucial to choose wisely any individual who will be granted significant power over your personal and financial affairs. While some of these risks may be inherent in the power of attorney regardless of its durability, the potential absence of the principal’s own oversight in a durable power of attorney makes it even more important to choose someone who can be trusted not only in character, but in judgment, to act both honestly and wisely without supervision.
Speak With a Florida Estate Planning Lawyer
Powers of attorney can be crucial elements in a comprehensive estate plan, in part because they are highly customizable and can be readily tailored to meet the demands of an individual’s specific set of circumstances. On the other hand, this very flexibility can mean that creating a durable power of attorney is often a complex process that involves multiple high-stakes decisions. Working with an estate planning attorney familiar with the laws in your jurisdiction who will take the time to get to know your goals and needs can make it easier to develop a durable power of attorney that directly addresses your core estate planning priorities. Reach out to Loughlin Law, P.A. today by calling 561-677-8384 to set up an appointment to discuss your needs.
