Reasons You Need a Power of Attorney
April 28th, 2022
Powers of attorney are important legal documents to include in every comprehensive estate plan. But unlike a last will and testament, and many types of trusts, these documents do not ensure your wishes are carried out upon your passing. Instead, powers of attorney are effective during your lifetime. They grant someone else the authority to make decisions on your behalf should you become incapacitated.
The main reason to have a power of attorney in place is to choose who will act for you if you cannot act for yourself. Without executing one in advance, the court will make this determination. Importantly, there are two types of powers of attorney that may be used — a financial power of attorney and a healthcare power of attorney. Each type serves a different purpose, and it’s crucial to have both in place.
What is a Power of Attorney?
A power of attorney is a document that allows you (the “principal”) to designate someone who will make financial or medical decisions on your behalf should you become unable to do so. The authority that is granted can be broad and general in nature or it may be limited to specific acts.
The individual you give decision-making authority to is referred to as your “agent,” or “attorney-in-fact.” However, they do not need to be a lawyer — the person you select as your agent can be a relative, friend, or anyone you trust to act in your best interests who is at least 18 years old and of sound mind. A financial institution with trust powers, such as a bank or business, can also be named as a power of attorney.
In order to be valid and enforceable, a power of attorney must be signed by the principal and two witnesses. It must also be properly notarized in accordance with Florida law.
When Does a Power of Attorney Terminate?
A power of attorney terminates if the principal revokes it, passes away, or becomes incapacitated. But by creating a “durable” power of attorney, the agent can continue to have authority to act on the principal’s behalf during the period of incapacitation. Most powers of attorney are drafted to be durable and go into effect immediately.
Although they are no longer recognized in Florida, other states may allow a “springing” power of attorney to be established. Rather than terminate when a certain event happens, this document authorizes an agent to act upon the occurrence of a specific event — such as a doctor declaring the principal to be incapacitated. Under Florida law, a springing power of attorney is only valid if it was executed before October 1, 2011 and is accompanied by an affidavit from the principal’s doctor attesting to the principal’s incapacity.
Why Would You Need a Medical Power of Attorney?
A medical power of attorney is one of the most important documents you can have in your estate plan. Also referred to as a “Designation of Health Care Surrogate” in Florida, this document enables you to choose a person to make healthcare decisions for you if you cannot communicate your wishes. These documents are often used along with a living will to ensure you have peace of mind that your instructions regarding your medical wishes will be followed.
Critically, a medical power of attorney can allow you to avoid a guardianship proceeding in court, in the event of incapacity. Not only are many of your rights taken from you if the court determines you are in need of a guardian, but the judge may appoint someone you had not intended to make your healthcare decisions. A durable medical power of attorney can help avoid these issues and the costs associated with the legal process.
Specifically, a medical power of attorney can authorize your agent to make decisions concerning:
- Medical treatment
- Medical actions
- Which facility should be used
- What doctor you should see
- Life sustaining measures
If you don’t have a medical power of attorney in place, the Florida Health Care Proxy statute determines the order of who will have healthcare decision-making authority for an incapacitated person. For instance, a spouse, adult child, parent, or other family member may step in as an agent when no other documentation has been executed.
When Do You Need a Financial Power of Attorney?
A financial power of attorney allows an agent whom you select to step into your shoes and act on your behalf to conduct financial transactions and handle your business affairs. This document can ensure your bills will be paid, your investments will be controlled, and real estate in your name will be managed if you become incapacitated. A financial power of attorney can also give your agent the authority to apply for government benefits on your behalf, establish trusts, operate your business, and more. The responsibilities you delegate in the document can be general or limited to certain tasks.
Whether you’ve been diagnosed with a health issue that could later impact your mental capacity or you’re planning your estate, it’s crucial to carefully choose who will act as your financial power of attorney. When these documents are drafted correctly, you can rest assured that your assets, property, and investments will be protected if you are no longer capable of making financial and business decisions.
Contact an Experienced Florida Trusts and Estates Attorney
Planning your estate can be stressful and overwhelming. At Waugh PLLC, we are committed to providing high-quality legal services for Florida estate planning matters and will work with you to create a comprehensive estate plan that meets your needs. We welcome you to contact us at email@example.com or call (321) 800-6008 to learn how we can help.
Categories: Estate Planning & Probate Law