Often times we have clients that need assistance in Florida. The great snowbird migration of the upper midwest to sunshine states can affect clients living in multiple states. In Michigan it seems that most seniors and retires enjoy spending winters in Florida.
Although we do not practice law in Florida, we frequently refer to experts in different ares of Florida law. One such expert that I frequently defer to in the areas of Elder Law, Medicaid Planning, Veteran’s Benefits, Probate, and, Estate Planning is Mark Lewis.
Mark is a highly skilled attorney working in the Tampa / St. Pete’s area. He can be reached at:
6830 Central Ave., Suite D St. Petersburg, Florida 33707 Tel No. 727-381-1946 Fax No. 727-384-4633
If you are a Michigan resident looking for help with Florida Law or are a Florida resident following this blog please feel free to contact Mark and let him know that you read this article.
Attached is a great article authored by Mark Lewis regarding recent changes to Florida law affecting power of attorney documents.
Florida’s New Power of Attorney Laws
Recently, on June 21, 2011, the Florida legislature enacted a sweeping overhaul and major change of the statutes of the State of Florida dealing with powers of attorney in Florida, effective October 1, 2011. The net effect is that if you have a power of attorney as part of your estate planning documents, you should consider executing a new power of attorney. The statutory overhaul does provide that “A power of attorney executed before October 1, 2011, is valid if its execution complied with the law of this state at the time of execution.” F.S.§709.2106(2). However, the new laws dealing with powers of attorney provides that third parties are required to accept the new powers of attorney and if they do not, a refusing third party can be held liable to the person who gave the power of attorney for damages and attorneys fees. F.S.§709.2116 and F.S.§709.2120. It also provides that the third party refusing to accept the power of attorney must give reasons in writing why they have refused to accept the power of attorney. F.S.§709.2120.
This ability to force third parties to honor the new powers of attorney is strong reason to execute a new power of attorney and ensures that the creator of the power of attorney will have his wishes and desires effectuated. Another fundamental change is that a new section F.S.§709.2105 has been added, and in that section, it is provided that powers of attorney must be in writing, witnessed by 2 people and notarized. Prior to that new section there was no such requirement, albeit, many powers of attorney met those requirements, since a power of attorney that was to be effective for the execution of a deed by an agent had to have been executed with the same formalities (2 witnesses) as a deed. A notary was required if you were going to record the power of attorney. As a result, practicality dictated that many old powers of attorney were in fact in writing, witnessed by 2 people and notarized.
Prior to the 2011 law change, some powers of attorney have been contingent on the incapacity of the person granting the power of attorney. The means of establishing that incapacity was set out by the old statute and required a reference to another statute dealing with incapacity, to wit F.S.§744.102(12)(a). As a result, under the old law the doctor making the affidavit had to state that the Principal ‘lacks the capacity to manage property, including taking those actions necessary to obtain, administer, and dispose of real and personal property, intangible property, business property, benefits, and income.” Under the new law, the physician merely needs to state that the Principal “lacks the capacity to manage property.” F.S.§709.2108, provides that such incapacity must be established by an affidavit of the grantor’s primary physician.
A new section has now prohibited other contingencies for the efficacy of a power of attorney other than military deployment. Accordingly, a contingency in a power of attorney of say marital status of the grantor would not now be allowed under the new statute, F.S.§709.2108(3). The only contingency allowed now is military deployment and incapacity of the Principal.
The new statutes also deal with compensation that can be paid to the agent or attorney in fact. Unless the attorney in fact or agent is a “qualified agent” he is not entitled to compensation, F.S.§709.2112(3), even if the power of attorney allows a non qualified agent to receive compensation. A qualified agent is an agent who is either the spouse of the principal, an heir of the principal as defined by F.S.§732.103, which is basically family of the principal, a financial institution, a Florida licensed attorney or CPA, or a resident of this state who has never been an agent for more than three principals at the same time. F.S.§709.2112(2) On the other hand, any agent is entitled to the reimbursement of “expenses reasonably incurred on behalf of the principal.” F.S.§709.2112(1).
The statutes codify the obligations of an agent and the level of care that the agent must exercise while acting on behalf of the principal, F.S.§709.2114, and require that the agent “keep a record of all receipts, disbursements, and transactions made on behalf of the principal.” F.S.§709.2114(4).
Another new section provides specifically for the revocation of a power of attorney, F.S.§709.2110, and it merely requires that the principal do the revocation in a subsequent executed power of attorney or another writing. Previous statutes talked about releases and notices of revocation. F.S.§709.08(5) (2010). Releases being when the agent did not want to serve anymore and revocation when the principal wants to terminate the power of attorney. Specifically F.S.§709.08(5) (2010) provided that a revocation had to be served on the agent or anyone who was relying on the power of attorney(served by personal service or certified mail). The new law does not require service on the agent, but provides that the principal may give notice to the agent who has accepted the power. F.S.§709.2110(1).
The amendment to the power of attorney laws requires that a third party who is presented with a power of attorney must accept or reject the power of attorney within a reasonable amount of time, F.S.§709.2120, and if it is rejected, the reason for the rejection must be in writing, F.S.§709.2120. There are two provisions allowing for an agent to enforce his power of attorney F.S.§709.2116 and F.S.§709.2120. The former section allows for the recovery of Attorneys fees by the prevailing party, but the latter section only allows for the recovery of Attorneys Fees by the agent.
Another game changing provision in the new power of attorney law is that some powers must be specifically enumerated and initialed in order to grant those powers to the Agent. Specifically, F.S.§709.2202(1) provides that following powers must be enumerated and initialed: creation of an inter vivos trust; revocation of a trust of the principal or amendment, modification, revocation or termination of the trust; making a gift; create or change rights of survivorship; create or change a beneficiary designation; waive the principles right be a beneficiary of a joint and survivor annuity, including the survivor benefit under retirement plan; or disclaim property or powers of appointment. Further, if those powers are contained in the power of attorney and they are initialed they can only be exercised an agent who is an “ancestor, spouse, or descendent of the principal if the exercise of the power creates authority to create in the agent or an individual to whom the agent owes a legal obligation of support,”… “an interest in the principal’s property, whether by gift, right of survivorship, beneficiary designation, disclaimer or otherwise,” F.S.§709.2202(2), unless the power of attorney specifically allows any agent to exercise those powers. In this author’s opinion, that may sound reasonable but it sets up the problem of establishing the negative by the agent, and thus, making the power of attorney potentially unusable if a well versed third party is being asked to accept the power of attorney.
In the gifting area, the new statutes allow a power of attorney to grant the power to make gifts, but there is a prohibition against gifts in excess of the Federal Gift Tax per donee exclusion, F.S.§709.2202(3), but the draftsmen can include a specific provision that gifts may exceed such a prohibition. This may present drafting problems so the wording of the gifting power has to be carefully worded.
The new law addresses what has been a long standing question by lay people of the necessity of a detailed enumeration of powers in a power of attorney. Specifically, many lay people have often said, “Why can’t I just say the agent can do anything I can do?” Whenever you try to answer that lay people seem to gloss over and think “damn lawyers, just justifying a fee.” In the new law at F.S.§709.2201(1), general powers of attorney purporting to allow the agent to do anything the principal can do are not going to be effective.
On the other hand, that section also provides clarification in that it provides that powers of attorney are also effective with respect to property acquired after the execution of the power of attorney, F.S.§709.2201(5).
There are other technical changes or additions explaining what banking powers are included and whether the utilization of those powers is authorized to change property that is owned with a right of survivorship, but those powers are probably best enumerated and spelled out in a new power of attorney rather than relying on the provisions of the new statutes. F.S.§709.2202(4). That is to say, if the power of attorney allows the agent to make deposits and withdrawals to bank accounts or investment accounts, it is probably a good idea to include a specific statement that this includes accounts that are in joint tenants with rights of survivorship, F.S.§709.2202 and they should be initialed by the Principal.
People utilizing powers of attorney after this change in the law should specifically ask their attorney if he has made changes to his power of attorney forms based on this updated provision for powers of attorney in the state of