Florida Wills & Trusts

September 2011 Update

Legal Developments

New Florida Power of Attorney Act

Introduction. The recent enactment of the new "Florida Power of Attorney Act" ( Fla. Stat. §§709.2101-.2402) added some additional restrictions and clarifications to the use of powers of attorney, and now requires careful consideration, and express authorization, of specific powers being granted. To give a detailed look at the new law, and to better explain its provisions and the reasons behind them, we are posting on our website the excellent Scrivener's Summary prepared by Professor David Powell, who assisted the DPA Committee in the long and arduous process. It is also available under the Other Resources topic. Here are the highlights of the changes in the law and in the Lawgic form.

1 Effective Date. The general effective date of the FPOA is October 1, 2011. "Legacy" Powers of Attorney (those signed before the effective date of the Act) are not rendered invalid by the Act, but, in general, the actions of attorneys-in-fact under Legacy Powers are to be interpreted under the new law. Exceptions include "springing" powers -- the new law eliminates contingent powers, but recognizes that aspect in Legacy Powers -- and documents not signed with the newly minted formalities.

2 Copies. A default provision in the new law gives photocopies and electronic copies of the power of attorney the same effect as the original. This area was unclear under prior law, and this is a valuable change, because it allows for a contrary indication in the power of attorney; there are arguments on both sides of the issue, but the important point is that the drafter must choose one approach or the other. A new question had been added to the program and the form will contain language specifying the choice.

3 Contingent Powers. As mentioned above, powers of attorney may no longer be contingent on the happening of an event, with two important exceptions: Legacy Powers that are "springing" continue in force, and become effective upon the later incapacity of the principal, and members of the military may use a "deployment contingent" power. One side effect of eliminating contingent powers is the inability to include a heath care authority that is contingent on the principal's incapacity (the concept of merging a Designation of Health Care Surrogate in a power of attorney, as Lawgic formerly allowed). The Lawgic provision (if chosen) now grants the attorney-in-fact immediate authority for making health care decisions, essentially becoming a Health Care Agent similar to that used in other jurisdictions. The principal effect of this is to act as a HIPAA release, as health care professionals will undoubtedly listen to the principal before the agent, assuming the former is competent.

4 Revocation and Amendment. Prior law referred to the revocation of a power of attorney, but did not specify the method, and did not explicitly state (as does the new law) that a subsequent power of attorney does not automatically revoke an existing power. The new law also expressly states that a power of attorney can be used to revoke a prior power if it so states. The Lawgic form does not presently provide for automatic (or even optional) revocation of prior powers in the new power of attorney because of perceived disadvantages with that approach; we recommend that a revocation be by a separate instrument that can be presented independently (currently available as a Lawgic form). Another aspect that the new law makes clear is that an existing power of attorney cannot be amended, but must be revoked in its entirety. This will be a factor in determining whether to include multiple attorneys-in-fact in a single instrument, or to do separate powers controlled by an escrow letter.

5 Trust Amendments. The new law made the decision to allow an attorney-in-fact to amend or revoke a revocable trust (already authorized in the Trust Code) a "special" provision requiring separate affirmation, by signature or initials, from the principal. The effect of the new law is that an attorney-in-fact can alter, amend, or revoke as well as create and fund a revocable trust for the principal, but only if the power is granted in the trust instrument and in the power of attorney. Lawgic previously limited any amendments by an attorney-in-fact to those that were necessary to preserve a tax benefit; given the expanded scope and dignity of powers of attorney, there may be less reason to keep this limit, and a new option has been added to the “Amendment by Agent” Question 152 which grants the attorney-in-fact the ability to amend a revocable trust if the power of attorney so provides.

6 Agent's Duties and Powers. An agent's duties under the new law can be described as Mandatory, Default, and Prohibited (see the Scrivener's Summary for a more detailed analysis of these categories). We have listed in excruciating detail the types of powers that the agent can exercise to comply with the new requirement for specificity, but the mandatory and prohibited powers are contained in the new "notice" directed to the attorney-in-fact. The principal should read this as well, but it seemed important to tell the attorney-in-fact what he or she must do and can't do.

One of the main changes (or clarifications) of the new law is a requirement that any power conferred on an attorney-in-fact be expressly stated. The blanket provision we have known for so many years purporting to allow an attorney-in-fact to do "anything the principal could do if present," is not a valid grant of power under the new law. (Whether that language was effective under prior law will be irrelevant very shortly, as this restriction applies to existing documents as well as newly executed ones.) For this reason, the Lawgic form of durable power of attorney has grown significantly, attempting to identify all possible (or at least probable) powers that might be given under the instrument. In addition to variations of the powers contained in the previous form, a number of items were extracted from the long list of Uniform Law powers. Other enhancements and additions have been made in keeping with the elevated dignity and responsibility associated with the new powers of attorney, and to provide some protection for agents who use them properly. And finally, the powers have been reorganized into sections that reflect the general subject, so a specific authority should be easier to find.

In developing the new law, the DPA Committee rejected the New York concept of incorporating by reference a laundry list of statutory powers. The only exceptions are in §709.2208, by which reference to banking or investment powers grant the authority listed in that section, and §709.2114 which cross-references the agent's ability to delegate duties to an investment advisor under §518.112. The Lawgic form contains extensive powers in these areas, but, at the risk of duplication, also adds the permitted references to facilitate acceptance by financial institutions.

7 Super Powers. The most significant change for practitioners is the requirement that a principal sign or initial beside certain types of powers that he or she wishes to bestow upon an attorney-in-fact. These so-called "Super Powers" represent actions that would greatly impact the principal's estate plan, and were thus deemed important enough to make sure the principal is aware they are being granted. The new Lawgic form has grouped these powers near the end of the document, and gives numerous choices regarding how detailed the powers can be. Of course, one option is to make the authority as broad as possible (e.g., "make gifts for estate planning purposes"), which has always been the approach in Lawgic. The addition of more choices that can be initialed or left blank may give some assurance that the client is aware of what is being signed (the drafting committee's goal).

8 Co-agents and Successor Agents. The new law reversed the default rule when multiple attorneys-in-fact were named in a single instrument. Previously if more than one person was named, action could only be taken by a majority; the new rule is that each "co-agent" can act independently (§709.2111). Lawgic previously allowed this independent action approach as an option, and continues to do so, but now also allows the drafter to choose a different approach if the default rule is not desired. The co-agents can be allowed to act independently, limited to acting by a majority, or even required to act unanimously. While the latter choice can present problems in using the power, some clients may prefer that level of cooperation. Prior law did not specifically address naming successor agents in a power of attorney, but the new law is broad and specific regarding them. Lawgic's form provides an option to name successor agents and includes a sample affidavit for the attorney-in-fact to use, even containing an optional reference for a successor agent. Despite the protections and flexibility provided under the new law, the value of the escrow approach in holding powers of attorney until the principal requests their release, or becomes incapacitated, has not been affected. In fact, with the elimination of springing powers and the new ratification of copies of the powers, the value of using the escrow approach has been enhanced.

Updated Product Features

New Durable Power of Attorney Form and Questions

The Durable Power of Attorney form has been totally revised to comply with the new "Florida Power of Attorney Act.” In addition, the program adds several new questions relating to the new form, such as the last 4 digit SSN, whether attorneys-in-fact should act individually, by majority or unanimously, option to expand the investment powers section, use of copies pursuant to Fla. Stat. §709.2106 and option to include special instruction lines.

New Questions 31, 41, 1200, 1201, 1216 and 1217 (SSN: Last 4 Digits, AIFs: How to Act, Expand Investment Powers, Use of Copies, and Include Special Instructions). Deleted old Questions 1197, 1198, 1203, 1204, (Springing Power of Attorney, Require Children’s Consent, Require Inventories and Accounts, Allow Majority to Act).

New Client Directs Signature for Joint Trust Questions

The program now asks if either Grantor needs to direct someone else to sign on his or her behalf because he or she is incapable of signing. New Questions 1099-1102

New Expanded Search Feature

The search feature has been expanded. In addition to searching the Navigator, Answers, Law & Strategy, Notes, Question Help, and Progress for a specific Title, it now allows you to search System Help, Title Help (Resources) and All Titles Help (Resources) by selecting Search on the Lawgic menu. This new function will help to facilitate and expedite your searches.

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To view those questions that are new in this update, or whose Law & Strategy, choices, or default answers have changed, use the "Up_Sep11" flag file. From inside Lawgic, open any existing answer file; on the Flags menu, click Open Flags, select the appropriate Title (click OK), and next select the "Up_Sep11" flag file (and click OK). To view all flagged questions, click Expand All on the Answers menu and scroll the Navigator. Flagged questions will be indicated with bold text.

Please continue to send us your suggestions on existing or new products. Contact our Technical Support Department at 1-877-2-LAWGIC (252-9442) or e-mail us at support@lawgic.com.