Why Do I Need A Durable Power of Attorney?
As we discussed in that prior post, a durable power of attorney is an extremely important estate planning tool, even more important than a will in many cases. This crucial document allows a person you appoint — your “attorney-in-fact” or “agent” — to act in place of you — the “principal” — for financial, business and legal, purposes when and if you ever become incapacitated due to dementia or some other reason, such as a stroke, heart attack, automobile accident, or other reasons that might arise. The agent under the durable power of attorney can quickly step in and take care of your affairs.
To properly execute a power of attorney and name an agent to stand in your shoes, you need to have legal capacity. Regrettably, many people delay completing this vital estate planning step until it’s too late and they no longer legally have the capacity for signing the document and giving it full legal effect. Won’t wait until its too late!
What Happens If You Do Not Have A Durable Power of Attorney?
What happens then? Without a properly executed durable power of attorney, no one can represent you unless a court appoints a conservator or guardian. That court process takes lots of time, costs lots of money, and the judge may not choose the person you would prefer. In addition, under a guardianship or conservatorship, the representative may have to seek court permission to take planning steps, make long term care decisions, engage in basic financial transactions, that your agent could implement immediately with a properly executed simple durable power of attorney. In effect, the judge, or the person appointed by the judge as your guardian, will be “in charge” of determining what issues are brought to the probate judge’s attention. Either the judge or the guardian will be making decisions that may have a profound effect on you and your family. No one really wants to be the subject of a guardianship.
This is why it’s so important that you have a durable power of attorney in place before the capacity to sign the document becomes an issue. The standard for legal capacity with respect to durable powers of attorney varies from state to state. Some courts and lawyers argue that this threshold can be quite low: that you need only know that you trust the agent to manage your financial affairs. Others argue that since the agent generally has the right to enter into contracts on behalf of the principal, the principal should have the capacity to enter into contracts as well, and the threshold for entering into contracts is fairly high. In Florida, you must show that the person signing the durable power of attorney has the capacity, and does in fact understand, who are the natural objects of his or her estate (the identity of children, grandchildren, etc.), and the nature, approximate value, and the extent of the estate assets.
How Do I Choose An Agent to Act on My Behalf?
If you do not have someone you trust to appoint as your agent, it may be more appropriate to have the probate court looking over the shoulder of the person who is handling your affairs through a guardianship or conservatorship. In that case, you may want to sign a limited durable power of attorney that simply nominates the person you want to serve as your conservator or guardian. Most states require the court to respect your nomination “except for good cause or disqualification.”
Because you need a third party to assess capacity and because you need to be certain that the formal legal requirements are followed, it can be risky to prepare and execute legal documents on your own without representation by an attorney. To sign a durable power of attorney before it’s too late, contact a local experienced elder law attorney.
Can I Prepare My Own Power of Attorney?
If you insist on preparing your own Florida durable power of attorney, without the assistance of a Florida attorney because you don’t want to meet with one or pay for one, we actually offer a power of attorney for you to prepare online that complies with all of the changes in the Florida power of attorney statute that was completely rewritten in 2011. We review your input for that power of attorney so that you can know that it will be enforceable in Florida.