What Is A Power Of Attorney And Why Do I Need It?

Most people prefer to handle their own finances, healthcare, and legal matters. The law generally requires people to handle their own matters as well. However, there are some instances where you cannot handle matters on your own. You may be hospitalized or otherwise incapacitated, or you may simply want to be able to let someone else handle a specific matter for you. In these instances, you can give someone else power of attorney so they can handle things for you. What is a power of attorney (POA)? Why do you need it? Are there different types? At Loughlin Law, P.A., our experienced South Florida estate planning attorneys may be able to assist you with creating a power of attorney that suits your needs, whether as part of your estate plan or on its own. Call (561) 677-8384 to review your legal needs in a free consultation.

What Is a Power of Attorney?

What is a power of attorney is a common question. The word “attorney” fools people into thinking this is something that a lawyer must do or that it is given to an attorney. A power of attorney is a legal document which grants another person the authority to make important financial or medical decisions on the giver’s, or principal’s, behalf. In Florida, the person given this authority is called an agent. Additionally, Florida does not require an attorney to create a power of attorney.

What Are the Types of Powers of Attorney?

Florida recognizes four types of power of attorney: durable, general/financial, limited, and medical. Individuals can create one or more powers of attorney and can assign each power of attorney to the same agent or to different agents, depending on their needs or wishes.

Durable POA

A durable power of attorney is simply a power of attorney which allows the agent’s authority to continue even after the principal is incapacitated. If a power of attorney is not durable, then the agent’s authority stops when the principal becomes incapacitated. Durable powers of attorney are often used in estate planning as individuals are planning for a possible future in which they are incapacitated.

Any power of attorney can be durable. However, in order to be durable, Florida §709.2104 requires the document to have a statement that says, “This durable power of attorney is not terminated by subsequent incapacity of the principal except as provided in chapter 709, Florida Statutes,” or a similar phrase.

General or Financial POA

A general or financial POA gives the agent the authority to handle financial and business matters for the principal. This type of POA does not allow the agent to make medical decisions on behalf of the principal. However, they can pay medical expenses that the principal incurs.

Per Florida §709.2202, while this POA does grant the agent the authority to handle financial and business matters, there are certain matters that require the principal to initial or sign their name beside each matter in order for the agent to be able to exercise them. These matters include, but are not limited to, creating an inter vivos trust, creating or changing rights of survivorship, and creating or changing a beneficiary designation.

Limited POA

A limited POA is one that limits the agent’s authority to act only in specific scenarios or to complete specific tasks. For example, the principal may give an adult child a limited POA that grants the child the authority to to sell a piece of property the parent owns in another state. A principal may also grant a POA to someone so the agent may discuss a specific matter with a bank or to handle specific matters while the principal is out of town.

Medical POA

A medical POA is also called a designation of health care surrogate in Florida. This POA gives the agent, or surrogate, the authority to make healthcare decisions for the principal. These decisions include treatment options, medications, surgery, end of life care, and more.

What Are the Requirements of Powers of Attorneys?

While it is not required to have a lawyer draw up a power of attorney, there are still some legal requirements that must be met for the POA to be legally valid. If you are concerned about making sure your POA meets all the legal requirements, a knowledgeable estate planning attorney with Loughlin Law, P.A. may be able to assist you in drawing up your POA.

To Make a Power of Attorney

To create a POA in Florida, an individual must be at least 18 years old. They must be of sound mind, which means they must understand their actions when signing legal documents. The POA must be signed in front of two competent witnesses and a notary. A medical POA is the only POA that does not require a notary, but it does still require two witnesses. The witnesses must be disinterested parties. This means the witnesses should not be the agent, a family member, an individual who would inherit when the principal dies, or someone providing healthcare services to the principal, such as a doctor.

To Be an Agent

To be an agent in the state of Florida, Florida §709.2105 requires the individual to be a natural individual who is at least 18 years old and of sound mind. This individual can be a friend, relative, business partner, or anyone else the principal trusts. If the principal does not have someone they trust to be power of attorney, it can also be given to a financial institution that has trust powers, authorization to conduct trust business in Florida, and has a Florida place of business.

Why Do I Need a Power of Attorney?

Giving someone a power of attorney requires a significant amount of trust. This document gives another person an incredible amount of power of the principal’s finances, business matters, healthcare, or other life aspect. Therefore, it is natural that people mind wonder why they need a power of attorney. There are several reasons that an individual would want to give power of attorney to someone else, including:

• Avoiding guardianship upon becoming incapacitated
• Allowing the agent to assist with day-to-day activities the principal cannot or does not want to deal with
• Allowing the agent to perform specific transactions that the principal may not be able to handle
• Giving the principal the choice of who makes decisions when they become incapacitated
• Reducing the mental and emotional stress loved ones may face when the principal is incapacitated

What Can a Power of Attorney NOT Do?

Powers of attorney offer a broad authority to the agent. While the principal can create a power of attorney that limits the agent’s authority, there are several things that someone with POA legally cannot do. Per Florida §709.2201, a power of attorney cannot:

• Perform duties for a contract that requires the principal to provide personal services
• Create an affidavit attesting to the principal’s personal knowledge
• Vote in public elections on behalf of the principal
• Execute or revoke a will or codicil for the principal
• Exercise authority and powers granted to the principal as a court-appointed fiduciary or trustee
• Take money directly from the principal’s bank account
• Make decisions after the principal’s death
• Give away the role as agent

How Can an Estate Planning Attorney Assist With Your Powers of Attorney?

What is a power of attorney? A POA is a document that entrusts another person with a significant amount of authority over the principal’s life. For that reason, it is important that the POA is clear and concise in the powers it is granting, as well as that the principal knows they can trust the agent. A skilled Boca Raton, Florida estate planning attorney at Loughlin Law, P.A. may be able to assist you in drawing up a POA that makes you feel confident in the authority you are granting, choose an agent you can trust, and determine if there are any other documents, such as advance directives or a will, that you may want to create to go with the POA. Call (561) 677-8384 to discuss your estate planning needs in a free consultation.