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Tuesday, October 11, 2011

New Florida Power of Attorney Law

Effective October 1, 2011, a new law went into effect dramatically changing the Florida Power of Attorney Statute. A Power of Attorney is a writing in which one party grants authority to an agent to act in place of the principal; each act performed by the agent pursuant to the power of attorney has the same effect and benefit to the principal and the principal's successors in interest as if th principal had performed the act.

Important changes in the new Florida law include:
  1. An individual can no longer make a springing power of attorney - a springing POA is a power of attorney that becomes effective in the event of disability or some future contingent event (there is an exception of military powers);

  2. All Florida Powers of Attorney must be durable powers of attorney (i.e. they must be effective when signed);

  3. A Grantor must specifically initial any provision that allows for:
    - gifting, changing beneficiary of a retirement account,
    - changing any benefiary of an annuity,
    - changing the ownership or beneficiary of a life insurance policy,
    - amending, modifying, creating, revoking or terminating a trust,
    - waiving the principal's right to be a beneficiary of a joint and survivor annuity, including surivor benefits under a retirement plan, or
    - disclaiming property and powers of appointment;

  4. If multiple agents are named, absent explicit direction otherwise, each agent may act unilaterally. This changes the presumption, it used to be that if multiple agents were named, they had to act together; and

  5. Third parties are required to accept a copy of the power of attorney (and not demand an original).
The new Power of Attorney Act also modifies and clarifies the duties of an agent. Specifically, the agent may not delegate authority to act as agent (except for investment functions), the agent must keep record of all receipts, disbursments and transactions made on behalf of the principal, and the agent may not act contrary to the principal's reasonable expectactions, including preserving the principal's estate plan.

The changes are not retro-active, so powers of attorney drafted before October 1, 2011 are still valid (including gifting provisions that are not initialed). However, to avoid confusion, it may be best to redo any older power of attorney forms you have.

1 comment:

simon said...

Florida residents have routinely named backup agents in their Florida Durable Power of Attorney. However, technically speaking, there has never been a basis in Florida law for doing so. The new law rectifies that situation by officially recognizing that backup agents may be included in the document. Also, under the new law, if you have named co-agents, each one can act alone without the consent or knowledge of the other, unless you specify otherwise in the instrument.
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