How Changes in Power of Attorney Law Impact Your Estate Plan
Did you know that a power of attorney allows you to grant another person, your agent, the authority to make financial or legal decisions on your behalf? Powers of attorney may be general or limited. A general power of attorney gives your agent the right to act on your behalf in all situations, whereas a limited power of attorney is granted for a specific purpose and a specific, usually short, period of time.
Most estate plans include general powers, and the main differences lie in when the general power takes or loses effect. A general non-durable power of attorney terminates if you become incapacitated, whereas a general durable power of attorney remains effective even if you become incapacitated, until your death. Both types are valid under Florida law. In 2011, however, the state made several changes to the laws governing powers of attorney. It can be important to read the new rules carefully to ensure that the powers of attorney in your estate plan are valid.
If your estate plan was finalized prior to October 1, 2011, your old powers of attorney can be grandfathered in and may remain valid. It may be likely still in your best interest, however, to update your powers of attorney if they are not congruent with the new rules. Powers of attorney created under another state’s law which are still valid in that state also continue to be valid in Florida, as do military powers of attorney.
In order for your powers of attorney to be valid, they must be signed by two witnesses and notarized. Under the 2011 law, “springing” powers of attorney that take effect only upon incapacitation are no longer available. Instead, all powers of attorney will take effect immediately. This can be helpful in avoiding confusion as to when your agent has the authority to act.
The 2011 law does not allow broad, non-specific grants of power to your agent. Instead, you must list in detail the specific powers you want your agent to have. For example, you can no longer say your agent has the authority to carry out “all financial transactions” and instead, you would need to say that your agent can pay certain bills, buy and sell securities, or authorize distributions from named accounts.
To help ensure that your estate plan remains valid and most effectively acts to achieve your goals, please reach out to our office to schedule an appointment.