In 2008 the AARP’s Public Policy Institute published a provocative report entitled Power of Attorney Abuse: What States Can Do About It.The AARP report highlighted what was wrong with existing POA statutes, how those failings lead to the exploitation of vulnerable adults, and urged state legislators to adopt the Uniform Power of Attorney Act or “UPOAA” as the best means for reform.
For an excellent plain-English explanation of Florida’s version of the UPOAA and how it will affect every new POA drafted in this state, you’ll want to read THE FLORIDA POWER OF ATTORNEY ACT – MORE DURABLE THAN EVER by Tami Conetta, of Northern Trust in Sarasota. Ms. Conetta’s paper also contains a copy of the Chapter 709 White Paper prepared by the Florida Bar’s RPPTL Section. And for those of you who find yourselves litigating the new statute, you’ll also want to read the official legislative white paper for the new statute contained in Florida Senate’s Bill Analysis and Fiscal Impact Statement.
Existing POA’s Grandfathered In: F.S. 709.2402
A power of attorney executed prior to the effective date of the Act will remain valid under the Act provided its execution complied with the law of Florida at the time of its execution. If the power of attorney is a durable (or springing) one, it will remain durable (or springing) under the new Act.
“Springing” POA’s no longer valid (but existing POA’s grandfathered in): F.S. 709.2108
Contingent, or “springing”, powers of attorney will not be authorized after the effective date of the Act. Those in existence prior to the effective date will continue to be recognized.
Subject to the qualification requirements (natural persons who are 18 years of age or older and financial institutions with trust powers), the principal may designate a single agent or, if desired, the principal may designate two or more persons to act as co-agents. Unless the power of attorney provides otherwise, each co-agent may exercise its authority independently. This is a significant change from current law.
Even where the power of attorney requires two or more agents to act jointly, there is a special exception for banking transactions to allow any one of the agents to sign checks and otherwise handle banking matters with a single signature.
If an agent becomes unable to act as a result of the agent’s death, incapacity, resignation, declination, or failure to qualify, the appointed successor agent (if any) may commence serving as agent. The filing of a petition for dissolution of marriage terminates the authority of an agent who is married to the principal unless the power of attorney provides otherwise.
New Drafting Requirements for POA’s containing “Superpowers”: F.S. 709.2202
The Act clearly allows a principal to grant authority to the agent to take significant actions that can impact the principal’s estate plan or gifting program, but one must be careful in the drafting and implementation of these powers as there are additional execution formalities and restrictions on the authorization. Special note should be made of the application of these rules to powers of attorney executed on or after October 1, 2011. These rules do NOT affect existing powers of attorney prior to that date. [See F.S. 709.2202(5): "This section does not apply to a power of attorney executed before October 1, 2011."]
Minimum Requirements. The following mandatory minimum requirements must be met:
- The authority must be specific. For example, “My agent may create and fund a revocable trust on my behalf.”
- [ ** NEW DRAFTING REQUIREMENT ** ]: The principal must sign or initial next to each specific enumeration of the authority.
- The agent may only exercise the authority consistent with the duty to preserve the principal’s estate plan.
- The exercise must not be prohibited by any governing document affected. For example, “My agent may amend or revoke my revocable trust.” But the trust agreement says the right of amendment or revocation is personal to the grantor and may not be exercised by anyone else.
The Superpowers. The powers that may be granted to the agent under this provision include:
- Create an inter vivos trust.
- With respect to a trust created by or on behalf of the principal, amend, modify, revoke or terminate the trust, but only if the trust instrument explicitly provides for amendment, modification, revocation or termination by the settlor’s agent.
- Make a gift (subject to restrictions).
- Create or change rights of survivorship.
- Create or change a beneficiary designation.
- Waive the principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan.
- Disclaim property and powers of appointment.
Modifiable Restrictions. If the agent is not related to the principal, the agent may not use these powers to benefit himself or anyone to whom the agent has a support obligation.