What is a power of attorney?
A power of attorney, usually abbreviated as “POA,” is a personal agent appointed by a principal to assist with the day-to-day financial affairs due to incapacity, inconvenience, or other reasons. In many cases, the agent acts alone on behalf of the principal when they are unable to do so.
For estate planning purposes, most POAs are intended to be durable. This means they remain in effect regardless of the principal’s later incapacity; so, if a principal appoints a durable POA when they are of sound mind, in the unfortunate event of incapacity, the principal doesn’t need to execute a new POA Authority. The POA will remain in effect until the principal terminates the relationship. Special language is used to ensure that a Florida POA is durable.
What are the powers of a power of attorney?
Essentially, the POA is authorized to do anything the principal has the right to do, so long as it has not been limited by the terms of instrument (this means the manifestation of the intent of the maker of the POA). The Florida statute requires that certain powers be expressly granted; said differently, an agent may not perform any of the following without certain
formalities.
- Create a trust
- Amend, revoke, or terminate a trust.
- Make gifts (the voluntary and immediate transfer of property from one person to another).
- Create or change survivorship rights.
- Create or change beneficiary designations.
- Waive the right of the principal as the beneficiary of a joint and survivor annuity or retirement plan.
- Disclaim property and power of appointment.
Are there any limitations on powers that are expressly granted? When should you use a power of attorney?
Yes. To prevent abuse of discretion of unintended tax consequences, even some powers that were expressly granted will be limited. These limitations can compromise the principal’s goals; it is important that the principal contact an attorney to ensure their objectives are achieved. As mentioned earlier, a POA should be used if you would like to grant an individual the power to act on your behalf to manage financial or other property matters without the need for expensive and time-consuming court proceedings.
How do I get started?
Start by writing down the name and address of the person you want to appoint. This should be someone that you have a lot of faith in and have complete trust. Then, give our office a call and talk to an attorney! We will help you get started and point you in the proper direction.
Lori Vella is an Estate Planning and Business Attorney. She works virtually throughout Florida and New York, but has her home office in Tampa, Florida. She is mom to a little boy which ignited the passion for helping other families. She and her son enjoy car rides, playgrounds and taking mini-adventures. They also have an organic garden that surprisingly yields vegetables. Lori considers herself well-versed in Seinfeld and welcomes any trivia!
Disclaimer: The Law Office of Lori Vella’s website contains general information directed to Florida residents. This firm does not intend to give legal advice through its pages and/or blog. If you need legal advice, we encourage you to find an attorney licensed in your state. This language on this website does not create an attorney-client relationship between you and this firm.