What is Power of Attorney and How Does it Work?

A power of attorney is an important legal document that allows you to appoint someone else to make decisions or act on your behalf if you become incapacitated or otherwise unable to make those decisions yourself. Having a well-drafted power of attorney in place can provide critical protection and peace of mind. This blog post will explain what exactly power of attorney is, the different types available, how to create one, and more.

What is a Power of Attorney?

A power of attorney (POA) is a legal document that grants authority to an “agent” or “attorney-in-fact” to make decisions or act on behalf of the “principal” – the person creating the POA. The agent can be given broad or limited authority over certain affairs as outlined in the POA.

A power of attorney gives the agent the legal authority to act and make binding decisions for the principal regarding their property, finances, healthcare, and more. It allows the agent to sign documents, access accounts, sell property, and handle the principal’s affairs as authorized.

Why You Need a POA No Matter Your Age

You may think only older adults need a power of attorney. But the reality is that anyone over 18 should have this critical legal document in place. Accidents and illnesses can strike at any age. Having a designated POA allows someone you trust to pay your bills, access your finances, make healthcare choices if you can’t speak for yourself, and more. Without it, your family would likely have to go to court to gain this legal authority through a conservatorship proceeding.

How Does a Power of Attorney Work?

When you create a POA, you designate someone you trust to act as your legal agent. This gives them the legal authority to sign documents, manage bank accounts, pay bills, and make other decisions on your behalf according to the powers laid out in the POA.

Some key things to know about how POAs work:

  • When signing the POA, the principal must be mentally competent.
  • It is legally required of the agent to act in the principal’s best interests.
  • The agent can begin using the POA as soon as it is signed, unless it is a springing POA that only becomes active when certain conditions are met.
  • The agent should keep detailed records of all actions taken under the POA for the principal’s benefit.
  • The principal can revoke the POA at any time as long as they are still mentally competent.
  • The POA is automatically revoked if the principal dies or becomes legally incapacitated, unless it is a durable POA.

Having a comprehensive POA helps avoid expensive and time-consuming court guardianship or conservatorship proceedings if you become unable to make decisions for yourself.

Types of Power of Attorney

Several types of POAs are available, with different levels of leakbio authority for the agent. The most common POAs are:

General Power of Attorney

A general POA grants the broadest authority for an agent to act on behalf of the principal. The agent is authorized to conduct all legal business for the principal, such as managing bank accounts, buying/selling property, signing tax returns, contracting services, and more.

Limited Power of Attorney

With a limited POA, the agent is only authorized to handle specific matters outlined in the POA document. For example, it may only grant authority related to banking, real estate transactions, or business interests. The agent cannot make decisions outside their defined scope.

Durable Power of Attorney

Even in the event that the principal is rendered incapable or disabled, a durable power of attorney is still in force. This allows the agent to keep managing the principal’s affairs without interruption if they become unable to make their own decisions. It remains valid until the principal dies or revokes it.

Springing Power of Attorney

This type of POA only becomes active if a specific condition is met, such as a doctor declaring the principal legally incompetent. As long as the principal is able to make their own decisions, the agent has no authority to act under a springing POA.

Healthcare Power of Attorney

Also called a healthcare proxy or medical POA, this authorizes the agent to make healthcare decisions on the principal’s behalf if they are unable to do so themselves. The agent can access medical records, choose treatment options, and more.

How to Create a Power of Attorney in Florida

Following these key steps will help you properly create a power of attorney in Florida:

  • Choose your agent wisely – Select a competent adult who you trust completely to act in your best interest. Name one or more successor agents in case your first choice cannot serve.
  • Draft the document – Carefully outline what powers are granted to the agent. Be as specific as possible about their authority.
  • Use proper form – In Florida, there are statutory POA forms that must be used for real estate transactions and healthcare decisions.
  • Customize powers – Tailor the POA to your unique situation. Limit certain powers if desired.
  • Sign with witnesses – You must sign the POA in front of two adult witnesses, who also sign the document. Some POAs must be notarized.
  • Inform others – Tell your bank, doctors, and financial institutions about your POA so they recognize the agent’s authority
  • Revoke if needed – If you want to terminate the POA, provide written notice to your agent and affected institutions.

We strongly recommend having an experienced estate planning attorney draft your power of attorney to ensure it is customized and properly executed under Florida law. The attorneys at Stivers Law can help create a POA that fits your needs.

Maintaining and Revoking Power of Attorney

Once created, a POA should be periodically reviewed to ensure it still meets your needs and wishes. You may want to update it if your health situation, agent availability, or goals change.

Under Florida law, you can revoke a POA at any time by destroying the original document and executing a written statement saying you revoke the POA. You should also notify your agent and anyone else aware you gave the POA.

If issues arise, you can go to court to request the POA be voided or the agent’s authority modified or removed if the agent is misusing their powers. As principal, you retain the ultimate ability to alter the POA terms.

Naming a Power of Attorney Agent

Choosing your POA agent is an important decision that should not be taken lightly. Here are some criteria to consider when selecting an agent:

  • Trustworthiness – Your agent must be honest and ethical and always act in your best interest. Never name an agent you have doubts about.
  • Availability – Choose someone readily available who can easily make the time commitments needed to manage your affairs.
  • Skills – Make sure your agent is capable and comfortable handling the type of tasks required, whether financial management, real estate transactions, healthcare decisions, or more.
  • Longevity – Consider an agent who is younger than you and likely to outlive you, so they can serve as your POA if you become incapacitated in later years.
  • Willingness – Your agent should be willing, prepared and interested in serving. Discuss your expectations and their duties before finalizing your POA.
  • Impartiality – Pick an agent who can make difficult decisions fairly and avoid any conflicts of interest.

Deciding who to entrust as your agent demands careful reflection. A Coral Gables estate planning attorney can provide guidance on selecting the best person to appoint under your POA.

Using a Power of Attorney for Real Estate

A POA can be very useful when buying, selling or managing real estate. Naming an agent under a POA provides them the legal authority to take actions like:

  • Signing real estate contracts and transaction documents on your behalf
  • Managing rental properties for you
  • Making repairs and improvements to property you own
  • Listing and selling property if you are unavailable or incapacitated

For maximum flexibility, it is advisable to create a durable POA that remains in effect even if you become disabled. This allows your agent to continue managing your real estate without disruption.

You can also tailor your POA specifically for real estate matters, limiting the agent’s powers to only those related to your property transactions and management. This more restricted POA prevents them from accessing your other financial accounts.

Having a POA for real estate matters helps streamline the buying/selling process, allows for delegated property management, and avoids problems if you become sick or injured and unable to conduct your own affairs.

Let Us Help You Appoint a Powerful POA

Planning for possible incapacity is a sobering but essential part of responsible financial and healthcare stewardship. An effectively drafted power of attorney can give you confidence that your affairs will be handled by someone you trust if you become unable to direct them yourself. However, POA rules vary significantly by state.

The dedicated estate planning attorneys at Stivers Law stay up-to-date on Florida POA regulations and best practices. We provide customized guidance based on your unique needs and circumstances, empowering you to appoint an agent with clearly defined authority to act in your best interests when you need them most.