The term power of attorney (POA) refers to a legal authorization that gives a designated person, or people, the power to act for someone else. As such, a POA gives the agent(s) or attorney(s)-in-fact the authority to act on behalf of the principal. The agent(s) may be given broad or limited authority to make decisions about the principal’s property, finances, investments, or medical care. A power of attorney terminates if the principal becomes incapacitated, unless it is a special kind of power of attorney known as a “durable power of attorney.” A durable power of attorney remains effective even if a person becomes incapacitated. A durable power of attorney must contain special wording that provides the power survives the incapacity of the principal. Most powers of attorney granted today in Florida are durable. Nobody can sign a power of attorney on your behalf. So, if you wait too long to establish a power of attorney, and then become incapacitated, it can be too late. If someone becomes incapable of establishing a power of attorney, the only option for the family to gain control of that person’s affairs may be Guardianship/Conservatorship court, a legal process that can cost tens of thousands of dollars.
Some of the powers that can be granted in a Durable Power of Attorney include, but are not limited to, the following:
- Managing everyday expenses of the family
- Receiving income from and paying expenses on real estate
- Controlling a financial portfolio
- Managing insurance and annuities
- Running a family’s small business
- Applying for governmental benefits on behalf of the principal or a dependent
- Hiring an attorney on behalf of the principal
- Enter into a contract on behalf of the principal or enforce the principal’s rights in a contract
Can the agent do anything they want?
No. The scope of legal authority granted by a POA is laid out when it is established. Furthermore, the person that is granted power of attorney has a legal fiduciary duty to make decisions that are in the best interests of the person for whom they are representing.
Can I Revoke a Power of Attorney I Have Given to Someone?
Power of attorney can be terminated if you expressly revoke it. It may also have a set termination date or duration of time for which it is in force. If naming a spouse as agent, the document can also specify that the power of attorney is terminated upon the initiation of divorce proceedings. If you die, all powers of attorney cease, so you cannot rely on the power of attorney to allow your family members to wind down your business or distribute assets upon your passing.
Always Have an Attorney Draft a Durable Power of Attorney
Creating a durable power of attorney protects you and your family if you can no longer handle your health or financial problems. An experienced estate planning lawyer can explain your options and the ramifications of each type of POA and advise you of the right powers to fit your needs. Often, clients who obtain a “one-size-fits-all” form from the internet run into problems down the road because of the form’s non-existent customization, the lack of important provisions that comply with state law and/or mistakes in executing the form itself. These shortfalls can lead to increased legal bills and Court costs from the Guardianship/Conservatorship Court process.
Brett Halperin focuses his practice on Estate Planning, Probate/Trust Administration, Elder Law, and Asset Protection. Brett works with clients of all asset levels to help them plan their estate and transfer wealth to their preferred beneficiaries. He can also assist family members who have lost a loved one navigate the probate process to gain control of the decedent’s assets.