By Anthony A. Velardi, Esq.
Estate Planning, Elder Law & Real Estate Attorney
What is a Durable Power of Attorney, and Why Is It Important?
A Durable Power of Attorney is an extremely powerful document in which you, as the principal, delegate certain powers to another person referred to as an agent or attorney-in-fact. In Florida, a Durable Power of Attorney is effective from the moment you sign the Durable Power of Attorney and does not depend on whether you are incapacitated at a later date. Sometimes people refer to a Healthcare/Medical Power of Attorney or a Financial Power of Attorney. In Florida, a Durable Power of Attorney is akin to a Financial Power of Attorney because a Durable Power of Attorney pertains to your finances, and a Living Will and Designation of Healthcare Surrogate are akin to a Healthcare/Medical Power of Attorney because those documents pertain to your healthcare decisions.
A comprehensive Durable Power of Attorney prepared by a lawyer covers areas such as banking, investments, buying and selling property, business transactions, handling claims and litigation, dealing with insurance, applying for public benefits such as Medicaid, and handling tax-related matters.
As the French author Voltaire poignantly stated long ago, “With great power, comes great responsibility.” Therefore, when thinking about who you should designate as your agent in a Durable Power of Attorney, I recommend someone who is mature, responsible, level-headed, fiscally prudent, and does not have any bad habits because that person will have access to your finances by virtue of the Durable Power of Attorney. Oftentimes, a person will choose their spouse, adult child, or close friend to act as their agent as well as a backup in case the first person is unable to serve or passes away, and I recommend choosing someone local, if possible, in case your agent needs to be on the scene at the drop of a hat and handle your affairs in an emergency.
According to Florida law, an agent under a Durable Power of Attorney must act in good faith with loyalty, care, competence, diligence, and keep a record of all receipts, disbursements, and transactions. An agent under a Durable Power of Attorney is also entitled to reimbursement for expenses as well as reasonable compensation unless the Durable Power of Attorney provides otherwise. A person is limited to serving as an agent under a Durable Power of Attorney for no more than 3 principals at the same time because some agents were using Durable Powers of Attorney to serve as de facto guardians of many principals and were exploiting unsuspecting victims.
A principal may revoke a Durable Power of Attorney at any time, and an agent may also resign at any time. A Durable Power of Attorney is only effective while someone is living, so an agent under a Durable Power of Attorney may no longer act for the principal through the Durable Power of Attorney after the principal passes away.
Although a Durable Power of Attorney can be a risky proposition if you appoint the wrong person as your agent, the benefits typically outweigh the costs because if you don’t have a Durable Power of Attorney and become incapacitated, you may need a guardianship which may be extremely expensive, time-consuming, and involves court oversight. As part of your overall estate plan, I highly recommend you have an elder law attorney prepare a Durable Power of Attorney for you.
Anthony A. Velardi, Esq.
AV Law PLLC
Treasure Island, FL 33706
727-641-4110
anthony@avlawpllc.com