Time to Review Your Power of Attorney
BY STEVEN D. BERES
As of October 1, 2011, Florida law concerning powers of attorney has been extensively revised. Florida residents with existing powers of attorney should take note of the effect of the new law on existing powers of attorney and also consider updating their powers of attorney to take advantage of additional planning opportunities which are now available.
Powers of attorney signed before October 1, 2011, continue to be effective. However, it is important to note that the new law may impact on your existing power of attorney in the following respects:
- Your agent’s authority may be reduced by the new law. Many powers of attorney prepared under prior law gave the agent general authority “to do all acts that I could do.” The new law provides that an agent may only exercise authority specifically granted in the power of attorney and makes it clear that a general grant of authority such as mentioned above does not give any authority to the agent.
- If your power of attorney names one or more co-agents then, unless the power of attorney provides otherwise, each co-agent can exercise their powers independently of the other co-agents. This is a change from prior law, under which two co-agents were required to act together, and three or more co-agents were required to act by majority, unless otherwise indicated in the power of attorney.
- A photocopy or electronically transmitted copy of an original power of attorney now has the same effect as the original. In practice, many financial institutions previously accepted copies of powers of attorney, but now they must accept copies. It is now more important than ever to be sure that all existing copies of your power of attorney are secure and not available to your agent unless you are comfortable with the agent currently using the power of attorney.
Even though existing powers of attorney remain effective, you should consider updating your power of attorney to increase its utility under the new law. Here are some reasons:
- You can assure that your power of attorney includes all powers you wish to give to your agent. Due to the new requirement that all powers be specifically granted, new powers of attorney will tend to be longer and more detailed than powers of attorney prepared prior to the new law.
- You can include new statutory powers to conduct banking and investment transactions by reference to the statute. It is anticipated that newer powers of attorney incorporating these statutory powers will be more readily accepted by Florida financial institutions. In addition, powers of attorney which include statutory banking or investment powers will be entitled to expedited review by financial institutions, as further discussed below.
- You can give your agent authority to engage in certain transactions that impact the distribution of your estate. For example, you may authorize your agent to make gifts, create a trust, modify a trust, create or change rights of survivorship on your accounts, or create or change a beneficiary designation on life insurance or a retirement account. It was uncertain whether you could confer these powers under prior law, but you may clearly do so under the new law. For such powers to be effective they must be specifically included in the power of attorney, and you must also sign or initial next to each of those paragraphs.
- Financial institutions must now accept or reject a power of attorney within a “reasonable time” after the power of attorney is presented for use by the agent. If statutory banking and investment powers are incorporated in the power of attorney, the “reasonable time” is limited to 4 business days.
Please contact me if you have questions concerning Florida’s new power of attorney law.