1. It is effective when signed. This means that, unless the agent does not have the original or a copy of the POA, the agent can take any action that is authorized in the POA, with or without the principal’s separate approval.
2. The agent owes specific duties to the principal and will be legally liable for violating those duties. In general, the agent must act on behalf of, for the benefit of, and in the best interests of the principal. A POA is not permission for an agent to take advantage of the principal or use the principal’s assets for themselves.
3. A POA can be revoked, but it is important to make sure that third parties are informed that the POA was revoked.
4. An agent can be removed by a court, but this may be expensive and not necessarily easy
On October 1, 2011, Florida substantially changed the law governing powers of attorney. The new law defined how and when POA’s are effective, created qualifications for agents/attorneys in fact, listed how and when a POA terminates or is revoked, prescribed how co-agents or successor agents may act, permitted only “qualified agents” to be compensated, specifically described an agent’s duties, created a method for court intervention, allowed third parties to challenge a POA before accepting it, and, importantly, required that certain powers be stated very specifically and separately signed or initialed by the principal.
Although a POA signed before October 1, 2011, or in another state, will usually be effective, it may or may not permit the agent to do what the principal actually wanted. In addition, a bank, brokerage, institution, or third person, may or may not challenge the “old” POA. The author of this Guide recommends that all existing plan documents, and especially powers of attorney, be carefully examined to make sure they still accomplish the goals for which they were drafted. In addition, the author recommends against using pre-printed or computer/internet generated powers of attorney.
Powers of attorney are one of the most effective and useful life planning documents. A properly-drafted POA allows an agent to take actions on behalf of a principal after the principal can no longer act for himself or herself. This is often very important when the principal becomes temporarily or permanently incapacitated or needs nursing home care and can allow the agent to preserve the principal’s assets, even if the principal must apply for Medicaid benefits. A living trust, if properly prepared and funded, can also be used in this way (see “living trusts”). Everyone should consider preparing a POA and/or living trust and consult with a qualified attorney about the risks and benefits of these devices for their specific circumstances.
Once the principal’s mental abilities decline, it may be too late to prepare or modify a POA. However, there are few hard and fast rules about when a person “has capacity” to prepare or modify a POA (or a contract, will, or other document). A person with dementia, for example, may still have capacity to create or modify a POA. Do not assume it is too late. Rather, consult a qualified attorney about what can be done.
Because mental and physical abilities often diminish with age, seniors are a prime target for unscrupulous people and businesses. If you believe that an agent, a professional, a business, a family member, a caregiver, or someone else has or is taking advantage of a senior, do something about it. There are special laws protecting seniors. You can consult an attorney about what is and is not appropriate or call Florida Adult Protective Services at 1-800-96 ABUSE.