by Estate Planning Attorney Nydia Menendez
A Durable Power of Attorney is a powerful tool that should be part of every Estate Plan. In the right hands it can make the difference between having a voice in our affairs in the event we become disabled or pass away, or not having one if we fail to designate the right person to make these decisions for us.
What is a Power of Attorney?
A Power of Attorney is a legal document delegating authority from one person – the “Principal” – to another – the “Agent,” also known as the “Attorney-in-Fact” or “Proxy.” The Power of Attorney activates upon issuance and extinguishes upon the death of the Principal.
The Principal must be competent; meaning they must understand the effect of a Power of Attorney, to whom the Power of Attorney is being given, and what property may be affected by the Power of Attorney.
Who Can be Your Agent?
In a Power of Attorney, the Agent can be a spouse, partner, adult child, or friend. But the most important aspect of choosing the right person is that he or she must be someone you trust and who will carry out your wishes and respect your decisions by following the instructions exactly as they are outlined.
Let’s Discuss the Superpowers
The authority granted by the Principal could be broad or limited to certain tasks such as selling a car, or banking transactions for a certain period of time.
In Florida effective in 2011, there are some specific acts or “superpowers” which can be included They are:
- Create an Inter Vivos Trust
- Amend, revoke, or terminate a Trust created by the Principal
- Create or change rights of survivorship
- Create or change a beneficiary designation
- Waive the Principal’s right to be a beneficiary of a joint and survivor annuity
- Disclaim property and powers of appointment
- Make a gift
The Principal must specifically grant the “superpower” to the Agent.
What if Someone Refuses to Honor a Power of Attorney?
Because a Power of Attorney is such a powerful legal document, it is not uncommon for third parties to refuse to honor them. The most common reason is that the third parties want to protect the Principal from possible unscrupulous conduct, and also to avoid the liability which could be associated with that. The third party may require the Agent to sign an affidavit stating the Agent is validly exercising the authority under the Power of Attorney, which will relieve the third party of liability for accepting a possibly invalid Power of Attorney. Other times, the Agent may need to hire an attorney.
What are the different types of Power of Attorney?
There are several different types of Powers of Attorney:
- A “Limited Power of Attorney” gives the Agent authority to conduct a specific act. For example, closing on the sale or purchase of real property.
- A “General Power of Attorney” typically gives the Agent broad powers to perform any legal act on behalf of the Principal. A list of the types of activities the Agent is authorized to perform must be included in the document.
- A “Durable Power of Attorney” remains effective even if a person becomes incapacitated. It must contain the phrase: “This Durable Power of Attorney is not terminated by subsequent incapacity of the Principal except as provided in chapter 709, Florida Statutes,” or words to the same effect.
Because it is impossible to know when an Agent will be needed, we usually recommend that every Estate Plan include a Durable Power of Attorney with the superpowers.
Power of Attorney statutes have had significant revisions in the last two decades. Sadly, we still see Powers of Attorney which do not comply with the Florida Power of Attorney Act. We recommend you contact our office or another qualified individual to be sure your documents are in order.
Where to Get Started?
If you want to learn more about how to plan for your future to make sure you leave a lasting and safe legacy for your loved ones, we invite you to call our office at (954) 963-7220 to speak with a member of the Menéndez Law Firm. You may also want to watch the video series on our YouTube channel where we talk about Estate Planning in detail. Or if you would like to join us for the next live Wills, Trusts and Estate Planning webinar on Zoom you can register at no charge on our website www.menendezlawfirm.com
Estate Planning Attorney
Menéndez Law Firm
2699 Stirling Road, Suite B200
Fort Lauderdale, FL 33312
Tel.: (954) 963-7220
Fax: (954) 963-7232