Florida Trust & Probate Attorneys Blog
Introduction
The Florida legislature recently enacted the “Florida Power of Attorney Act” (“FPOA”, Fla. Stat. §§709.2101-.2402), fundamentally overhauling existing law, and making sweeping new changes. Even though the new law recognizes durable power of attorneys (“DPA’s) executed under the prior law, we are advising clients to update their DPA, if more than a year old, because the changes are so comprehensive. For Florida licensed attorneys who receive our Alert, we are making available at cost our new “Super DPA’s” drafted to take advantage of the new law.
Effective Date: The effective date of the FPOA is October 1, 2011. “Legacy” POA’s, or those signed before October 1, 2011, are not invalid, but the action of the agents or attorneys-in-fact under Legacy POA’s must be interpreted under the new law.
Key Changes
1. Powers to Attorneys-In-Fact must be explicitly stated. A popular blanket provision that allows the agent to do “anything the principal could do if present” is not valid. The practical effect of this law is that a good POA must set forth in fine detail – let’s call it excruciating detail – all powers. A good POA is likely to be 10-20 pages; the redraft of the POA for a single person that I have recently prepared is 17 pages.
2. Principal Must Sign or Initial Certain Powers. These are special powers that would significantly alter the Principal’s estate plan, such as the power to make gifts, disclaim interests, change rights of survivorship accounts, change beneficiary designations, or create or modify an inter vivos trust. Such powers must be initialed or left blank for the purpose to give some assurance that the client is aware of his or her choices.
3. Springing POA’s Are Eliminated. However a Springing POA is still valid if signed prior to October 1. Note: I have never prepared a Florida Springing POA, and I have never seen one in 15 years of practice because of inherent problems in knowing or proving if the DPA has “Sprung”.
4. Copies. A default provision in the new law gives photocopies or electronic copies of the POA the same effect as the original.
5. Revocation. An existing POA cannot be amended, but must be revoked in its entirety.
6. Co-Agents. Reversing prior law, the new law allows that if more than one agent is named, each co-agent can act independently. See §709.2111.
7. Prohibited Powers. The Agent’s duties and powers can be described as Mandatory, Default and Prohibited. Such Prohibited powers include
• Perform duties under a contract requiring personal services;
• Make an affidavit as to personal knowledge;
• Vote in a public election;
• Execute or revoke a Will or Codicil; or
• Exercise powers or authority that the Principal holds in a fiduciary capacity (e.g., as a Trustee).
These prohibitions are consistent with current Florida Law.
Note: For an excellent summary of FPOA, see Professor David Powell’s Scrivener’s Summary. To read, click FPOA Summary.
Take Away Points
1. Who Should Update Their POA? Experienced estate planning attorneys know that banks and other financial institutions dislike POA’s and will look for any excuse not to honor one. In Florida, this means that a POA needs to be up-to-date, Florida specific, and compliant with Florida law. Given the sweeping changes of the new law, my advice to clients is to update your DPA if older than a year. The new law recognized those POA’s executed prior to October 1, 2011 (so called “Legacy POA”), but soon the practical reality will be that all banks will impose numerous obstacles for POA’s that are executed prior to October 1, 2011.
2. Prepare Affidavit for Attorney-In-Fact. The financial institution can demand an Affidavit from the Agent that the Principal is not deceased and
that the DPA has not been revoked among other facts. It will likely make sense to have this Affidavit prepared at the same time as the DPA in anticipation that most institutions will likely be requesting it.
3. Super DPA vs. Limited DPA with Security Provisions. The new law enables the estate planning attorney to truly create a “Super DPA”. Of course such a DPA in the wrong hands carries significant risk. My advice to clients is that you only give any DPA to those persons in whom you have a high degree of confidence in their judgment and honesty. If you do not have this confidence, the answer is usually not preparing a limited DPA with security provisions; the answer is find a person or persons you do trust.
It may be a good idea to give the Super DPA to two persons who can act as a check and balance if there is any lack of confidence.
Conclusion: Good Time to Update or at Least Review
Since the new statute so fundamentally changes the law on DPA’s, and even though the new law recognizes durable power of attorneys (“DPA’s) executed under the prior law, we are advising clients to update their DPA if more than a year old. The “one year advice” is purely arbitrary, however, I suggest it is good practice.
Final Note: We have available for Florida licensed attorneys Super DPA’s forms to take advantage of the new law; these DPA’s come in two types: Super DPA Form #1: married with children; Super DPA Form #2: single with children. Both forms include an Affidavit for the Attorney-In-Fact. The cost for all forms is $275. To purchase, contact info@raricklaw.com or call Rarick & Associates at (305) 556-5209.
Disclaimer
The information in this article is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult a Florida attorney.