3 Tips to Prevent Exploitation with a Florida Power of Attorney
A power of attorney is a legal document delegating authority from one person to another. The maker of the power of attorney is called the “principal.” In the document, the principal grants the right to act on the maker’s behalf as that person’s agent. What authority is granted depends on the specific language of the document. A person giving a power of attorney may make it very broad or may limit it to certain specific acts. A person can grant Power of Attorney over their finances, property, health care, child, and business.
State law governs a power of attorney, and Florida law changed in 2011. After 2011, a Florida Power of Attorney is no longer springing – it does not just come into life when a person becomes incapacitated. Instead, the document is live and active from the moment you sign it. This can make it a dangerous document, especially if a form document granting broad powers is used. Still, a power of attorney gives someone the authority to act on your behalf, so that means if you do become incapacitated, there is no need for anyone to spend thousands of (your) dollars to get a guardianship of you.
There are three things you can do to prevent exploitation:
1. Limit Authority:
· Do not give your agent unlimited power to make gifts. Gifts may be necessary or desired in certain instances, such as holidays, birthdays or special occasions. These can be clearly defined and detailed in your power of attorney with the help of your attorney.
· Do not give unlimited power to change beneficiaries in a life insurance policy or financial accounts. Note that it may be necessary to change a beneficiary or assign a life insurance policy incident to a Medicaid or SSI application. If this is a possible need for a client, I’ll draft limited authority into the document for this purpose.
2. Choose Your Agent Wisely:
· The most important step in reducing the risk of exploitation is careful selection of the agent being named. The agent should be trustworthy and reliable. You may want to choose someone who has certain skills, shares your values, and will be able to help you make decisions. I encourage my clients to have a thorough and open discussion of the proposed agents that goes beyond simple question of who do you want to name as your agent? Consider what makes them the best person for the job right now.
3. Keep it Safe:
· Hold off on giving your agent a copy of the document until they need it, and keep it in a safe and secure place. Some clients will have me hold the original and then tell their agent to contact me if they become incapacitated, so that I then give the agent the document. You could also have the document drafted to require that only the original power of attorney be used (otherwise copies can also be used), but that will make it a little less practical for the agent down the road and can cause problems if they lose the original.
Revocation of a power of attorney is always an option for the principal. Circumstances can change, and you have the right under Florida law to change your mind about who will serve as your agent by revoking your power of attorney. A revocation should be served upon the agent to whom you originally gave power so they have notice of it.
A power of attorney is a useful tool in avoiding guardianships. If you have questions about it or need help in preparing one, please contact me.