• Estate PlanningDurable Power of Attorney

    Florida permits an individual (the Principal) to execute what is known as a Durable Power of Attorney, authorizing another individual or entity (bank, trust company, etc.) to serve as his or her Attorney-in-Fact (the Agent) to act on their behalf in the handling of some or all of their affairs.

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    Unlike a general power of attorney, a Durable Power of Attorney continues to be effective after the Principal becomes disabled or incapacitated.

    However, in the event a Petition for the Adjudication of Incapacity is filed in a Court of competent jurisdiction, which questions the capacity of the Principal, all powers under the Durable Power of Attorney are automatically suspended.

    In appointing a Guardian for the Principal, the Court may authorize the Agent to resume the exercise of some or all the powers. All powers of attorney, regardless of whether they are durable or general powers, terminate at death.

    Florida Law regarding the Durable Power of Attorney was substantially amended in October, 2011 to provide greater scope and variety of such powers.

    The new law allows a Principal to grant authority to an Agent to take significant actions that can impact the Principal’s Estate Plan or gifting program.

    Known as “superpowers,” the following powers may be given to an Agent under this provision:

    1. Create an inter vivos trust.
    2. With respect to a trust created by or on behalf of the Principal, amend, modify, revoke, or terminate the trust, but only if the trust instrument explicitly provides for amendment, modification, revocation, or termination by the Agent.
    3. Make a gift of any of the Principal’s property outright to or for the benefit of a person, including by the exercise of a presently exercisable general power of appointment held by the Principal, which may or may not be limited to the federal gift tax annual exclusion amount, as specified in the Durable Power of Attorney.
    4. Create or change rights of survivorship.
    5. Create or change a beneficiary designation.
    6. Waive the Principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan.
    7. Disclaim property and powers of appointment.

    These “superpowers” may only be created by the Principal initialing next to the enumerated authority contained in the body of the Durable Power of Attorney Instrument. Otherwise, Agents are now under a mandatory duty to preserve the Principal’s Estate Plan. Also, the Durable Power of Attorney must now be executed before two (2) witnesses and be acknowledged before a Notary Public.

    To come within this amended law, the Durable Power of Attorney document must have been executed on or after October 1, 2011.

    Durable Powers of Attorney should contain express authorization enabling its holder to gain access to any and all of the Principal’s medical records and related information under the Health Insurance Portability and Accountability Act of 1996 (a/k/a HIPAA).

    More so now than ever before, care should be exercised in the choice or selection of an Agent, particularly where superpowers are created by a Principal. Opportunities for abuse by an Agent are necessarily enlarged by the grant of authority to alter title to the Principal’s assets, create lifetime/testamentary arrangements which by-pass or supercede existing Estate Planning documents that were previously executed by the Principal.

    For this reason, the new law has created a process of judicial review under which a Court of competent jurisdiction may construe or enforce a Durable Power of Attorney, review the Agent’s conduct, terminate the Agent’s authority, remove the Agent, or grant other appropriate relief.

    A sample Durable Power of Attorney appears as Exhibit VIII of our Firm’s book.

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    If you or a loved one needs help with a situation involving one of these areas, please contact Thomas N. Silverman, P.A. at 561.775.7500 (24 hours) or info@FloridaProbateCounsel.com.

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