A power of attorney is a legal instrument you may give to a trusted family member or friend (commonly called your attorney-in-fact or agent) to manage your financial affairs and act on your behalf. The person creating the document is referred to as the principal. A Durable Power of Attorney (DPA) differs as it remains effective after the principal becomes incapacitated. In order for a DPA to remain effective it must include language stating that subsequent incapacity will not affect the powers of your agent.
Note: Florida's Durable Power of Attorney law was completely rewritten effective October 1, 2011. If you have a Florida Power of Attorney dated prior to October, 2011, we strongly recommend that you update it.
4 Reasons Why a Florida Durable Power of Attorney Is So Important
1. Avoid court intervention- Guardianship. If you become incapacitated and have not designated an agent your loved ones may need to open a guardianship proceeding to act on your behalf. A strong, up-to-date DPA can save you thousands of unnecessary court costs and avoid a court intervening in your personal and financial affairs. We advise that every person over the age of 18 should have a DPA.
2. Negotiate and Pay Medical Bills. If you have a medical emergency and are hospitalized or simply do not want to deal with your medical insurance after a surgery, with a DPA your agent will have the ability to speak to your insurance company to negotiate and question medical bills.
3. Handle your Bank, Retirement and/or Investments Accounts. With a carefully drafted DPA your agent will have the ability to handle your financial affairs including the ability to speak to your bank or investment advisors to ensure your investment style remains the same and your money is well protected.
4. Assign or Transfer Property to Your Trust. Often times it is not until there is an emergency that people will worry about funding their living trust. Your agent, if given the right powers, will have the ability to make transfers into your trust.
Note: A Florida Durable Power of Attorney is only in effect while the principal is alive and should not be used once the principal has died.
A strong Durable Power of Attorney has numerous detailed and explicit powers, such as:
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The ability to sell or convey real estate interest.
Having a Durable Power of Attorney ensures your affairs are managed if you become incapacitated. -
The power to allow your agent to make gifts on your behalf for estate planning
purposes. The gifts may be limited to the federal tax exclusion amount or used for
Medicaid planning.
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Successor Agents. Under the new law you can name back up agents in one
instrument.
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The power to change rights of survivorship or beneficiary designation: Note: This is
a “Super Power”; extra caution should be exercised before giving this power.
Conclusion: A Durable Power of Attorney is a valuable legal tool and if used correctly it can protect you. However, it is also a powerful instrument that must be signed with caution and only name a family member or friend you have complete trust in. You should not attempt to draft your own DPA as there are many formalities required that may not be discovered until your agent attempts to use it, which is usually too late. For example once the principal is incapacitated or unable to sign a new DPA.
A strong DPA can have far reaching legal consequences. Consult a Miami Lakes Estate Planning attorney prior to signing any Durable Power of Attorney.
For further information, contact attorney Jacqueline Bowden at (305) 556-5209 or email at [email protected].
Disclaimer: This article is provided for informational purposes only and does not constitute legal advice. Reading this content does not create an attorney-client relationship between you and Gold Legacy Law. For legal advice regarding your personal situation, please contact our office to schedule a consultation.
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