The Florida Statute (Chapter 709) that addresses powers of attorney was revised substantially by the Florida Legislature’s passage of Senate Bill 670 on May 4, 2011. The new statute became effective on October 1, 2011. While the new law does not make a power of attorney properly executed prior to the effective date void, the new statute nevertheless applies to those powers of attorney that were executed prior to the effective date. Therefore, it is important to review existing powers of attorney to understand which terms will be subject to a different set of rules.
- The new law does away with most springing powers of attorney (those that “spring” into effect upon a certain event such as incapacity).
- To revoke a prior power of attorney, the principal executes a written document so expressing that desire (it need not be witnessed or notarized, though it is advisable nonetheless).
- The new law provides that a photocopy or electronic copy of the power of attorney have the same effect as the original.
- The power of attorney is suspended upon the initiation of a judicial proceeding to determine capacity of the principal or for a guardianship proceeding.
Agents: The principal may name a single agent or multiple co-agents and in the event that co-agents are named, each may exercise its authority independent from the others. Under the previous law, unless the document specifically stated, all agents were required to act jointly.
Compensation: Under the new Act, an agent is entitled to reimbursement for expenses reasonably incurred while acting in the capacity as the attorney-in-fact; however, a big departure from the prior law is that only a “qualified agent” may receive compensation for services rendered. A qualified agent is defined as a spouse or an heir of the principal, a financial institution with trust powers and a place of business in Florida, an attorney or accountant licensed in Florida, or a natural person who is a resident of Florida and who has never been an agent for more than three principals at a time.
Powers: One of the biggest changes in the law with this Act is that the following powers require that the principal must sign or initial next to each power they are giving to their agent.
- Create a living trust and amend, modify, revoke or terminate a trust created by the principal
- Make a gift;
- Create or change rights or survivorship;
- Create or change a beneficiary designation;
- Waive the principal’s right to be a beneficiary of a joint and survivor annuity; and
- To disclaim property and powers of appointment.
In an apparent attempt to curb financial abuse theft, at least by non-family members, the agent may not create in himself or herself, an interest in the principal’s property, whether it is through gift, by beneficiary designation, title change to an account or asset, or otherwise. This prohibition does not apply to a spouse, ancestor, or descendant of the principal.
Acceptance: When a power of attorney is presented to a third party, the new law requires that third party to accept or reject the power of attorney within a reasonable time (four business days) and to provide a written explanation for rejection. The new law also provides for damages, including attorney’s fees and costs, for a third party who refuses to accept the new power of attorney that is in proper form and properly executed.
The new Act has other changes not addressed here that may be of no less importance than those described above. Accordingly, you should contact a qualified Florida attorney to explain the changes to you and how they may affect your planning and whether it would be appropriate for you to execute a new Durable Power of Attorney after October 1, 2011, to ensure that you will have the full rights, privileges, and protections provided by the new law.