A Power of Attorney (POA) is a powerful instrument because it provides authority for one person to act in another person’s legal capacity. A POA should be drafted by an attorney to ensure that it is tailored to your particular circumstances. Pre-printed forms may not protect your legal rights. Consult the experienced attorneys at our firm to help you draft a comprehensive POA.
As an introduction, a POA is a document by which one person, or “principal,” gives authority to another person, or “agent,” to act on behalf of the principal. Under Florida law, a properly executed POA requires:
- The principal’s signature;
- Two people to witness the principal’s signature; and
- A notary to acknowledge the principal’s signature.
Limited vs. General
The POA is effective as soon as the principal signs it. The principal may use a POA to authorize the agent to do one specific legal act or do many specific legal acts. A POA that limits the agent to perform a specific act is called a “Limited Power of Attorney.” For example, suppose you recently moved to Florida from Alabama where you own a home. You may use a limited POA to authorize another person to handle the sale and closing locally.
In contrast, a POA can provide the agent with very broad authority to perform any legal act on behalf of the principal. This is called a “General Power of Attorney,” and it could permit an agent to sell the principal’s real or personal property, access the principal’s bank accounts or make healthcare decisions for the principal. Although a general POA must list the particular acts the agent is authorized to take on behalf of the principal, a specific list is not required when the POA contains one or both of the following phrases:
- “authority to conduct banking transactions as provided in section 709.2208(1), Florida Statutes”
- “authority to conduct investment transactions as provided in section 709.2208(2), Florida Statutes.”
If the POA refers to either of these statutes, the agent my conduct all of the acts permitted by the referenced statute even though the POA itself does not list the specific acts.
The principal must be competent to sign a POA. A POA is no longer effective if the principal becomes incapacitated, unless it is a “Durable Power of Attorney” that was executed before October 1, 2011. A durable POA remains valid even if the principal becomes incapacitated, but it is not effective until a doctor certifies the principal’s incapacity. A durable POA must contain special language that allows it to survive the incapacity of the principal. Durable Powers of Attorney may not be created after September 30, 2011.
Advanced Care Directives
It’s important to distinguish a Health Care Surrogate Designation (HCSD) and a Declaration of Living Will (DLW) from a durable POA. These are documents made in advance of incapacity or necessity. An HCSD is a document in which the principal designates another person to make health care decisions on behalf of the principal if he or she is unable to make those decisions. A DLW is document that specifies a person’s wishes as to the administration of medical treatment when he or she is diagnosed with a terminal illness or is in a persistent vegetative state.
Advanced Care Directives vs. Durable POA
An HCSD appointee has no power to act until the principal’s doctor has determined that the principal does not have the ability to make informed health care decisions. However, a durable POA specific to health care may allow the agent to assist the principal in health care decisions even though the principal may not completely lack capacity. Even if a person has a DLW, a person’s agent may make health care decisions if the durable POA specifically provides this power.
Agent vs. Principal
Any person who is at least 18 years old and of sound mind and body may serve as an agent, but he or she is not obligated to serve. However, once an agent exercises a power granted by the POA, he or she has a fiduciary duty to act in the best interests of the principal. This means the agent must fulfill the principal’s reasonable expectations and desires, make wise investments and use reasonable care in managing the principal’s assets. The principal-agent relationship is one of trust, and if the agent violates this trust, he or she could face civil liability and criminal sanctions. The agent may hire competent attorneys, accountants or other professionals to assist the agent in making prudent decisions but cannot delegate his or her responsibility as agent to those persons.
The agent’s authority under a POA terminates when:
- The agent dies;
- The agent resigns or is removed by a court;
- The agent becomes incapacitated; or
- There is a filing of divorce if the agent is the principal’s spouse, unless the POA states otherwise.
Third Parties vs. POA
Sometimes third parties refuse to accept a POA out of concern that it is not valid for one reason or another, and they want to avoid liability for accepting an invalid document. Third parties must provide the agent a written explanation for refusing within a reasonable time (four days for financial institutions) after the POA is presented to the third party. Third parties are permitted to require an agent to sign a statement swearing that the principal is not dead and the POA is valid and effective. However, third parties may not demand an additional form for acts authorized under the POA. If the third party unreasonably refuses to honor the POA, the court may force the third party to accept the POA and hold the third party liable for damages, including attorney’s fees and court costs. Unreasonable delay in honoring the POA may also give rise to third-party liability.
A POA properly executed under the laws of another state are also valid in Florida. Note that if an out-of-state POA is used to convey real property in Florida, that POA must have been executed with two witnesses and a notarized acknowledgement even if those are not requirements in the state of execution. A military POA is valid in Florida if properly executed under federal law.
Termination of POA
A POA automatically terminates when:
- The principal dies;
- The principal revokes the POA in writing;
- A court finds that the principal is totally or partially incapacitated and does not specifically decide that the POA is to remain in force;
- The purpose of the POA has been achieved; or
- The term of the POA expires.
Consult the Tampa “Power of Attorney” Lawyers at Lieser Skaff Alexander
If you need to draft, change, protect, revoke or dispute a POA, consult our firm to ensure your legal rights are protected. If you are unsure whether you are authorized to do a particular act, talk with us before taking any action that could subject you to liability. If a third party is refusing to accept a POA or is unreasonably delaying acceptance, ask our firm for guidance on what recourse can be taken. Seek our legal counsel if there is conflict between an agent holding a durable POA and an appointee named in an advanced care directive. If you discover that guardianship or incapacity proceedings involving the principal have been instituted, or you learn that the court has appointed a guardian for the principal before the date the principal signed the POA, you should immediately contact our firm.