Law

Power of Attorney (POA): Meaning, Types, and How and Why to Set One Up

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A power of attorney is one of the most important legal documents you can have in place. Having a POA in place can provide you with peace of mind that your wishes will be carried out even if you are not able to handle your own legal, financial, or healthcare matters.

This comprehensive guide will explain what a power of attorney is, the different types, how to create one, and why having a power of attorney is so critical.

What is Power of Attorney?

A power of attorney is a legal document that designates an agent or attorney-in-fact to act on your behalf. The person creating the POA (the principal) gives the agent authority to manage certain affairs, which may include financial, legal, medical, and other matters. The agent may be authorized to perform a broad range of actions or limited to specific duties outlined in the POA document.

Powers of attorney can be extremely useful in situations where the principal is unavailable or incapacitated. They allow the agent to handle important tasks like paying bills, managing real property, and making healthcare decisions without the principal needing to be present.

Reasons to Create a Power of Attorney in Florida

There are many reasons Florida residents may want to execute a POA:

  • Travel or military service – If you travel frequently or serve in the military, a POA allows someone to handle your affairs while you are gone.
  • Capacity concerns – As we age, illness or accidents can leave us unable to make our own decisions temporarily or permanently. A durable POA ensures someone you trust can take over if this occurs.
  • Avoid guardianship – Creating a POA may help you avoid court-ordered guardianship if you become incapacitated. The court will look to see if you have a POA before appointing a guardian.
  • Peace of mind – Knowing your affairs will be handled as you wish provides comfort if you can no longer act for yourself.

Types of Power of Attorney in Florida

Florida recognizes several types of POA, each with its own uses and provisions:

Durable Power of Attorney

A durable POA takes effect as soon as it is signed and remains in effect even if the principal becomes incapacitated. It gives the agent broad authority to manage the principal’s affairs immediately or only when certain conditions are met. Durable POAs are the most common type created.

Springing Power of Attorney

A springing POA “springs” into effect only when a certain event occurs, usually the principal’s incapacity. The POA document specifies one or more doctors who must confirm the principal’s inability to manage their affairs. Once the springing POA is activated, the agent has the authority to act.

Limited Power of Attorney

A limited POA gives the agent authority for a specific situation or period of time. For example, a limited POA could authorize the agent to sell a home or vehicle while the principal is out of the country. The agent’s powers are restricted to those outlined in the POA.

Healthcare Power of Attorney

Also called a healthcare proxy, this POA authorizes someone to make medical decisions if you are unable to do so. The agent can access your medical records, consult with doctors, and consent to treatments based on your wishes. A healthcare POA is essential for those who want to choose their medical decision-maker.

Financial Power of Attorney

This POA grants an agent authority over your financial and legal matters. The agent can manage bank accounts, pay bills, file taxes, and more based on the powers set forth in the POA. A financial POA is useful if illness or injury makes you unable to handle money matters.

How to Create a Valid POA in Florida

To create an enforceable POA in Florida, follow these key steps:

  • Use a Florida statutory form or have an attorney draft the document to comply with state law
  • Name one or more agents and successors in case your first choices are unable to serve
  • Customize the POA’s powers to provide the authority you want your agent to have
  • Sign the POA in front of two adult witnesses; a notary public must also witness and validate your signature
  • Give copies to your agent and places they may need to present it, such as banks and doctors’ offices
  • Store the original POA in a safe but accessible place in case it is needed
  • Review the POA regularly and update it if your needs or agents change

Properly creating and storing a POA ensures your document remains legally valid if it needs to be used. Consult an attorney if you need help preparing a power of attorney in Florida.

Using a POA: Agent Responsibilities and Liabilities

In Florida, an agent acting under a POA has a fiduciary duty to the principal. This means the agent must make decisions in the principal’s best interest. The POA document itself does not place any specific legal obligations on the agent, however.

The agent is not liable to the principal for honest mistakes or errors in judgment. But if the agent intentionally breaches their fiduciary duty for personal gain, they may face civil or criminal penalties.

Signs of POA abuse by an agent can include:

  • Using the principal’s assets for the agent’s benefit
  • Failing to follow the principal’s reasonable instructions
  • Failing to keep records or provide an accounting when requested

If you believe an agent is abusing their powers, contact an attorney to review your options. In some cases, the POA may be revoked, while in others, legal action against the agent may be warranted.

Key Benefits of Establishing a POA

There are many good reasons to take the time to create a POA:

  • Prevents court intervention if you become incapacitated or unable to make decisions for yourself. Your agent can immediately step in.
  • Offers control over your affairs if you are unavailable or unable to handle matters. You pick someone you trust versus having a court-appointed guardian.
  • Allows you to outline wishes in advance for finances, healthcare, living situations, and other preferences if you become incapacitated.
  • Provides convenience if you need someone to handle certain matters, like selling property, while you are away.
  • Gives you peace of mind that there is a plan in place for the future if you ever become unable to make your own decisions.
  • Helps protect your assets by authorizing a trusted agent to make sound financial decisions on your behalf and prevent financial abuse by others.
  • Ensures bills and healthcare needs are met by someone with legal authority through your POA if you cannot do so yourself.
  • Avoids family disputes since you have outlined your advance directves rather than leaving it up to divided relatives to decide.

For these reasons, a POA is considered an essential part of every estate plan. Take time now, while you are able, to carefully put a POA in place so your wishes and best interests can still be handled seamlessly on your behalf when needed.

Revoke Power of Attorney in Florida

As long as you are competent, you can revoke a POA at any time by:

  • Destroying the original POA document
  • Executing a new POA that revokes all prior POAs
  • Signing a POA revocation form

To revoke a durable POA, you must notify the agent directly. You should also notify any third parties, like banks or doctors, that may have relied upon the POA. Failure to provide notice can leave the old POA enforceable.

If you create a new POA, be sure to include specific revocation language so all prior POAs are canceled. An estate planning attorney can help craft revocation provisions to avoid any uncertainties.

Common POA Mistakes to Avoid in Florida

While a POA can be invaluable, some common mistakes could make your document ineffective or invalid:

  • Not having it witnessed and notarized properly when you sign it.
  • Failing to make it “durable” so it remains effective if you become incapacitated.
  • Writing it yourself without an attorney when your situation has complex legal, financial, or healthcare needs.
  • Not registering it correctly with financial institutions, medical providers, or the court if required.
  • Naming an agent who is not trustworthy or capable of managing duties
  • Not keeping it updated as your agents, preferences, or state laws change over time.
  • Not informing your agent that they have been appointed, so they are unprepared to act.
  • Allowing your agent to act against your best interests or misuse their authority

Avoiding these pitfalls ensures your POA operates smoothly. Being diligent about properly creating, communicating, and updating your POA allows you to maximize its benefits.

Protect Against Power-of-attorney Abuse.

If you have questions about creating or updating a power of attorney, consult a local estate planning firm like Vollrath Law. An experienced lawyer can ensure your document is customized for your needs and enforceable under Florida law.

They can also advise your agent about their duties and limitations. With a comprehensive POA in place, you can gain confidence that your healthcare, financial, and legal matters will be handled as you wish if the need arises.

Eric Lilly
the authorEric Lilly