Power of Attorney by Stevens

What is a "General Power of Attorney?"

A "General Power of Attorney" typically gives the agent very broad powers to perform any legal act on behalf of the principal. A specific list of the types of activities the agent is authorized to perform must be included in the document.

What is a "Limited Power of Attorney?"

A "Limited Power of Attorney" gives the agent authority to conduct a specific act. For example, a person might use a Limited Power of Attorney to sell a home in another state by delegating authority to another person to handle the transaction locally through a "limited power of attorney." Such a power could be "limited" to selling the home or to other specified acts.

What is a Power of Attorney?

A Power of Attorney is a legal document delegating authority from one person to another. In the document, the maker of the Power of Attorney (the "principal") grants the right to act on the maker's behalf to an agent. What authority is granted depends on the specific language of the Power of Attorney. A person giving a Power of Attorney may make it very broad or may limit it to certain specific acts.

What are some uses of a Power of Attorney?

A Power of Attorney may be used to give another the right to sell a car, home or other property. A Power of Attorney might be used to allow another to access bank accounts, sign a contract, make health care decisions, handle financial transactions or sign legal documents for the principal. A Power of Attorney may give others the right to do almost any legal act that the maker of the Power of Attorney could do, including the ability to create trusts and make gifts.

What is a "Durable Power of Attorney?"

A Power of Attorney terminates if the principal becomes incapacitated, unless it is a special kind of Power of Attorney known as a "Durable Power of Attorney." A Durable Power of Attorney remains effective even if a person becomes incapacitated. However, there are certain exceptions specified in Florida law when a Durable Power of Attorney may not be used for an incapacitated principal. A Durable Power of Attorney must contain special wording that provides the power survives the incapacity of the principal. Most Powers of Attorney granted today are durable.

What is the relationship between a Declaration of Living Will and Power of Attorney?

A declaration of living will specifies a person's wishes as to the provision or termination of medical procedures when the person is diagnosed with a terminal condition, has an end-stage condition, or is in a persistent vegetative state. A living will and a health care surrogate designation are termed "health care advance directives" because they are made in advance of incapacity and need. If a person is unable to understand or unable to communicate with a doctor, a living will is a legally enforceable method of making sure the person's wishes are honored. Whether a person has a living will, a person's agent may make health care decisions if the Durable Power of Attorney specifically gives this right.

Where may a person obtain a Power of Attorney?

A power of attorney is an important and powerful legal document as it is authority for someone to act in someone else's legal capacity. It should be drawn by a lawyer to meet the person's specific circumstances. Pre-printed forms may fail to provide the protection desired.

What is "fiduciary responsibility?"

An agent is a fiduciary and as such has multiple duties when acting for the principal. These include an overriding duty to do only those acts authorized by the Power of Attorney, and when performing those acts to act in accordance with the principal's reasonable expectations, to act in the principal's best interest, and to attempt to preserve the principal's estate plan. The preservation of the estate plan is dependent on a number of factors, including the agent's knowledge of the plan and the needs and desires of the principal. If the agent assumes responsibility for the principal's investments, the agent has a duty to invest and manage the assets of the principal as a prudent investor. This standard requires the agent to exercise reasonable care and caution in managing the assets of the principal. The agent must apply this standard to the overall investments and not to one specific asset. If an agent possesses special financial skills or expertise, he or she has an obligation to use those skills. The agent is required to keep careful records and may be required to provide an accounting. Everything the agent does for the principal should be written down, and the agent should keep all receipts and copies of all correspondence, and consider logging phone calls so if the agent is questioned, records are available. Agents should consult with lawyers to be sure they understand all of the duties applicable to them.

What activities are permitted by an agent?

An agent may perform only those acts specified in the Power of Attorney and any acts reasonably necessary to give effect to the specified acts. If an agent is unsure whether he or she is authorized to do a particular act, the agent should consult the lawyer who prepared the document or other legal counsel. Two types of acts may be incorporated by a simple reference to the statutes in the Power of Attorney - the "authority to conduct banking transactions as provided in section 709.2208(1), Florida Statutes" and the "authority to conduct investment transactions as provided in section 709.08(2), Florida Statutes." When either of these phrases is included in the Power of Attorney, all of the acts authorized by the referenced statute may be performed by the agent even though the specific acts are not listed in the Power of Attorney itself.

Who may serve as an agent?

Any competent person 18 years of age or older may serve as an agent. Agents should be chosen for reliability and trustworthiness. Certain financial institutions with trust powers may also serve as agents

What is a "third party?"

As used in this pamphlet, a "third party" is a person or institution with whom the agent has dealings on behalf of the principal. Examples include a bank, a doctor, the buyer of property that the agent is selling for the principal, a broker, or anyone else with whom the agent must deal on behalf of the principal.

What if the principal has a "guardian" appointed by the court?

If no less restrictive appropriate alternative is available, then a guardian may be appointed by the court for a person who no longer can care for his or her person or property. A person who has a guardian appointed by the court may not be able to lawfully execute a Power of Attorney. If an agent discovers that a guardian has been appointed prior to the date the principal signed the Power of Attorney, the agent should advise his or her lawyer. If a guardianship court proceeding is begun after the Power of Attorney was signed by the principal, the authority of the agent is automatically suspended until the petition is dismissed, withdrawn or otherwise acted upon. The law requires that an agent receive notice of the guardianship proceeding. If a guardian is appointed, the Power of Attorney is no longer effective unless it is a Durable Power of Attorney and the court allows the agent to continue to exercise certain powers. A power to make health care decisions, however, is not suspended unless the court specifically suspends this power. If the agent learns that guardianship or incapacity proceedings have been initiated, he or she should immediately consult with a lawyer.

What if the third party will not accept the Power of Attorney?

If the Power of Attorney was lawfully executed and it has not been revoked, suspended or terminated, third parties may be forced to honor the document. The third party is required to give the agent a written explanation of why they are refusing to accept the Power of Attorney within a reasonable time after it is presented to the third party.

What is the difference between a "trustee" and an "agent"?

Like a Power of Attorney, a trust may authorize an individual (the "trustee") to act for the maker of the trust during the maker's lifetime. Like an agent, the trustee may manage the financial affairs of the maker of the trust. A trustee only has power over an asset that is owned by the trust. In contrast, an agent may have authority over all of the principal's non-trust assets. Another important distinction is that a trustee may continue acting for the maker of the trust after the maker of the trust dies. In contrast, the Power of Attorney expires upon the death of the principal. Whether a trust or an agent is the most appropriate tool for a specific situation is a question that should be addressed to an attorney.

What is a "principal?"

The "principal" is the maker of the Power of Attorney - the person who is delegating authority to another. This is the person who is allowing someone else to act on his or her behalf.

When is a Power of Attorney effective?

The Power of Attorney is effective as soon as the principal signs it. However, a Durable Power of Attorney executed prior to Oct. 1, 2011 that is contingent on the incapacity of the principal (sometimes called a "springing" power), remains valid but is not effective until the principal's incapacity has been certified by a physician. Springing Powers of Attorney may not be created after Sept. 30, 2011.

Authority as agent has been suspended because guardianship proceedings are pending for the principal. Now there is an emergency but no guardian has been appointed yet. What now?

The agent may ask the court for special permission to handle the emergency even though the Power of Attorney remains otherwise suspended. Contact your lawyer.

How should the agent sign when acting as an agent?

The agent will always want to add after his or her signature that the document is being signed "as agent for" the principal. If the agent only signs his or her own name, he or she may be held personally responsible for whatever was signed. As long as the signature clearly indicates that the document is being signed in a representative capacity and not personally, the agent is protected. Though lengthy, it is, therefore, best to sign as follows: Howard Rourk, as agent for Ellsworth Toohey. In this example, Howard Rourk is the agent, and Ellsworth Toohey is the principal.

When does a particular agent's authority terminate?

The authority of an agent under a Power of Attorney automatically ends when one of the following things happens: (1) the agent dies, (2) the agent resigns or is removed by a court, (3) the agent becomes incapacitated, or (4) the filing of a petition for dissolution of marriage if the agent is the principal's spouse unless the Power of Attorney provides otherwise.

When does a Power of Attorney terminate?

The authority of any agent under a Power of Attorney automatically ends when one of the following things happens: (1) the principal dies, (2) the principal revokes the Power of Attorney, (3) a court determines that the principal is totally or partially incapacitated and does not specifically provide that the Power of Attorney is to remain in force, (4) the purpose of the Power of Attorney is completed, or (5) the term of the Power of Attorney expires. In any of these instances, the Power of Attorney is terminated. If, after having knowledge of any of these events, a person continues to act as agent, he or she is acting without authority

What is the procedure for a principal to revoke a Power of Attorney?

The revocation must be in writing and may be done by a subsequent Power of Attorney. Notice should be served on the agent and any other party who might rely on the power. The notice should be served either by any form of mail that requires a signed receipt or by certain approved methods of personal delivery. Special rules exist for serving notice of revocation on banks and other financial institutions. Consult with your lawyer to be sure proper procedures are followed.

What are the responsibilities of an agent?

While the Power of Attorney gives the agent authority to act on behalf of the principal, an agent is not obligated to serve. An agent may have a moral or other obligation to take on the responsibilities associated with the Power of Attorney, but the Power of Attorney does not create an obligation to assume the duties. However, once an agent takes on a responsibility, he or she has a duty to act prudently.

Is there a certain code of conduct for agents?

Yes. Agents must meet certain standards of care when performing their duties. An agent is looked upon as a "fiduciary" under the law. A fiduciary relationship is one of trust. If the agent violates this trust, the law may punish the agent both civilly (by ordering the payment of restitution and punishment money) and criminally (probation or jail). The standards of care that apply to agents are discussed under Financial Management and the Liability of an Agent.

May a Power of Attorney avoid the need for guardianship?

Yes. If the alleged incapacitated person executed a valid Durable Power of Attorney prior to his or her incapacity, it may not be necessary for the court to appoint a guardian since the agent already has the authority to act for the principal. As long as the agent has all necessary powers, it may not be necessary to file guardianship proceedings and, even when filed, guardianship may be averted by showing the court that a Durable Power of Attorney exists and that it is appropriate to allow the agent to act on the principal's behalf

Must a person be competent to sign a Power of Attorney?

Yes. The principal must understand what he or she is signing at the time the document is signed. The principal must understand the effect of a Power of Attorney, to whom he or she is giving the Power of Attorney and what property may be affected by the Power of Attorney