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Power of Attorney in Florida - Ultimate Guideline

Florida Power of Attorney

A Florida power of attorney (“POA”) allows you (the “principal”) to designate an “agent” to act on your behalf. The power of attorney in Florida is primarily used for financial transactions. However, in Florida you can also allow the agent to make health care decisions for you, the Designation of Health Care Surrogate is a document better suited to that end. 

The Florida power of attorney is controlled by Part II of Chapter 709 of the Florida Statutes.

Types of Powers of Attorneys in Florida

Depending on your specific needs, the type of Florida power of attorney you create will vary. The authority you give to your agent may be general in nature or very specific. In Florida you can create the following powers of attorneys:

  1. General Power of Attorney: the general power of attorney allows you to give your agent broad authority. Your agent will be able to do financial transactions like banking, buying or selling real estate, deal with the government, among others.
  2. Limited or Special Power of Attorney: the limited power of attorney is used when you need to give your agent authority only for a specified purpose and for a limited duration. For example, if you travel out of the country you can designate an agent to complete a closing on a property. Once the purpose or duration ends, the authority terminates. 
  3. Durable Power of Attorney: the durable power of attorneys allows the authority you give to your agent to stay effective even after your incapacity. The durable power of attorney can be made general or specific. in order to create a durable power of attorney the document must state that “this durable power of attorney is not terminated by subsequent incapacity of the principal except as provided in Chapter 709, Florida Statutes.
  4. Springing Power of Attorney: Florida removed the ability to create “springing powers” as of 2011. The springing power of attorney kicked in the authority when you become incapacitated. Present law is that the power of attorney is effective immediately. 

Capacity to create a power of attorney in Florida

The first thing you must think about before executing a Florida power of attorney is whether you or someone else has the capacity to execute the document.

In order to create a power of attorney in Florida you must have capacity. In a general sense, capacity means that you understanding what you are executing and the effect of the power of attorney. 

As long as you understand the effects of the power of attorney, you will have the capacity to execute it. When I talk about capacity, I mean mental capacity.

A lot of the time, potential clients come to me when their family friend has dementia or some other mind debilitating disorder. At that point, executing a power of attorney can be risky, but technically the person can execute the power of attorney if the person has lucid moments and they understand what they are signing at that moment.

Execution requirements of a Florida power of attorney

According to Section 709.2105, in order for the power of attorney to be valid, you must sign the Florida power of attorney in the physical presence of two (2) witnesses and must be acknowledged by a notary.

You must all sign in the presence of each other when executing the power of attorney. This is one requirement that often gets overlooked. 

Qualification of Agent for the Florida power of attorney

Section 709.2105 of the Florida Statutes states that the  agent must be a natural person who is 18 years of age or older or a financial institution that has trust powers, has a place of business in this state, and is authorized to conduct trust business in this state.

When designating your agent, make sure you designate someone that you trust. The agent will have full and exclusive authority to carry out the purpose of the power of attorney. Although an agent may be liable for breach of fiduciary duty for acting outside of the scope of the power of attorney, you don’t want to place yourself in that situation.

When selecting your agent, you want to choose someone close to you that has a general understanding of your intent and wishes. You want to communicate to your agent your general goals and how you want your property to be administered.

Agent's duties under the Florida power of attorney

The relationship between you and your agent is a fiduciary relationship. Your agent must act within the scope of the authority granted under the power of attorney.

The agent must act in good faith, and must not act contrary to your best interest and your reasonable expectations if they have been communicated. F.S. 709.2114

If your agent acts against the scope of the power of attorney or against your best interests, then the agent may be liable to you or your successors for the amount required to restore the value of the property to what it had been had the breach not occurred, and reimburse you or your successions for attorney’s fees for funds spent to go after the agent for his or her violations. 

Authority of the agent under the Florida power of attorney

Section 709.2201 of the Florida Statutes states that an agent only has the authority specifically granted under the power of attorney. However, under the power of attorney the agent does not have the authority to vote in public elections, execute or revoke a will, exercise personal services under a contract for your behalf, make an affidavit as to your personal knowledge, or exercise powers as trustee or a court appointed fiduciary on your behalf.

In addition to the authority mentioned above, under F.S. 709.2202 you must also separately initial a list of powers in order to give your agent the authority:

(a) Create an inter vivos trust;
(b) With respect to a trust created by or on behalf of the principal, amend, modify, revoke, or terminate the trust, but only if the trust instrument explicitly provides for amendment, modification, revocation, or termination by the settlor’s agent;
(c) Make a gift;
(d) Create or change rights of survivorship;
(e) Create or change a beneficiary designation;
(f) Waive the principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan; or
(g) Disclaim property and powers of appointment.
 

Many people think that as agents they are able to transfer property to their names in order to avoid probate. However, unless you give initial the power to make gifts, the agents will not be able to freely dispose of any property. Even if you give your agent powers to make gifts, you can also limit the gifts and to whom the agent is authorized to make gifts. 

I generally advise my clients that unless gifting is needed for estate tax purposes or if they completely trust their agent to carry out their intent, to avoid giving the agent gifting powers. The reason for this is if the agent uses his powers to make gifts, especially to himself or herself, other members of the family might frown upon the activity of the agent. This is especially true when the agent is one of the children and the other siblings are out of the loop.

Termination and revocation of the Florida Power of Attorney

A Florida power of attorney terminates when:

(a) You die;
(b) You become incapacitated, if the power of attorney is not durable;
(c) You are adjudicated totally or partially incapacitated by a court unless the court determines that certain authority granted by the power of attorney is to be exercisable by the agent;
(d) You revoke the power of attorney;
(e) The power of attorney provides that it terminates;
(f) The purpose of the power of attorney is accomplished; or
(g) The agent’s authority terminates and the power of attorney does not provide for another agent to act under the power of attorney. F.S. 709.2109

You may revoke the power of attorney by executing another writing revoking the power of attorney or by creating a new power of attorney and expressing that the new power of attorney will revoke any previous authority given.

Beware that creating a new power of attorney without expressly revoking the prior power of attorney will not revoke the previous power of attorney. You may have more than one agent acting on your behalf. 

Reasons to Use a Florida Power of Attorney

Avoid Guardianship Court Upon Incapacity

Have a durable power of attorney, together with a designation of health care surrogate, allows you to avoid guardianship court if you ever become incapacitated.

Guardianship can be an expensive and cumbersome process. Many of your rights are removed if you are declared incapacitated. From my experience, guardianship proceedings to appoint a guardian and declare someone incapacitated can cost in the low end at $3,500, but I seen them run as high as $7,500 depending on the complexity of the case.

On top of that, annual accounting’s and reports must be filed with the court every year, and the court will also have oversight in a lot of the decision making of the guardian.

You can avoid a lot of these costs by having a proper durable power of attorney in place.

Allow Your Agent to Help You with day-to-day Activities

With a power of attorney, you can allow your agent to help you with your day-to-day tasks. As we grow old, we need more help to do things that we had more energy and capacity to do. 

With a proper power of attorney in place, your agent can make payment on your behalf of your monthly bills, speak with governmental agencies where you are receiving benefits, help you prepare your taxes, manage your business, among many others. 

Allow your agent authority to do a specific transaction

A power of attorney is useful if you want your agent to be able to perform a specific transaction on your behalf.

A power of attorney is used in many real estate transactions to allow someone else to be able to complete closings or giving someone else the power to sell your properties.

Lets assume you will be traveling out of the country and you have an important transaction that need to be completed. This is the perfect opportunity to give someone else a limited power of attorney to complete the specified transaction. 

Contact my office if you want to create a Florida power of attorney

I hope you found this information valuable. If you have any questions regarding Florida power of attorneys make sure to complete the form in this page and I will personally answer them.

I specialize in drafting powers of attorneys. If you are interested in preparing a power of attorney call my office at (305) 489-1415 or reach out to me directly through the contact me form.

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