• 01
  • September
    2011

Florida citizens need to be aware that a new statute will take effect October 1, 2011, regarding how durable powers of attorney will operate in the Sunshine State. This law taking will signify the first change to Florida's power of attorney statute since 1995.

The law requires durable powers of attorney to be executed with two witnesses and be notarized in order to be effective. That change is intended to clear up some confusion in the language of the previous statute.

While out-of-state durable powers of attorney that are valid in their state or origin will be honored in the Sunshine State, if you have an existing durable power of attorney in Florida, it may need to be updated. Also, the new statute has some nuances that could make execution of an effective out-of-state power of attorney quite difficult for Florida residents.

For example, broad language giving the agent extensive authority, such as "to do everything the grantor could do," are now invalid under Florida's new law. The law requires grantors to use specific language describing specific acts the agent will be authorized to do. This is intended to reduce power of attorney abuse, which is when an agent uses a power of attorney for his or her own benefit and against the best interest of the grantor.

Agents can still be granted wide authority, but it will need to be specifically outlined in the power of attorney. For example, a grantor can still allow self-dealing by the agent (so long as it is not against the grantor's best interest), but clear language must be included, which is dictated by the new statute.

Also requiring special language now is the grant of authority for the agent to authorize banking and investment transactions, including changing beneficiaries and making changes to an estate plan. Not only must the statutorily-required language be present, but the grantor must also initial each clause to specifically acknowledge the authorization of that authority.

The change in the law also affects how agents are paid and reimbursed for expenses related to their duties. Under the new law, only those considered "qualified agents" can be paid for their work or reimbursed for expenses. Qualified agents include family members, trust companies, attorneys and accountants. Professional guardians and geriatric care managers are not qualified agents under the statute, which complicates payment and reimbursement for those agents.

Most people should include a durable power of attorney in even the most basic estate plan, because it gives someone authority to handle your day-to-day business should you become incapacitated. If you have an existing power of attorney, this change in the law could impact whether it will work as you expect, so you should have a lawyer review it.

Source: Florida Today, "Focus on Seniors: Florida's power of attorney statute will change," William Johnson, Aug. 21, 2011