ShareThisBy ALAN S. NOVICK
Thursday, October 19, 2006
Dear Mr. Novick:
I am in the process of making an estate plan, including a health care surrogate, a living will declaration, and last will and testament. I would also like to include a durable power of attorney to be effective if I should become incapacitated or mentally incapable of managing my financial affairs. I have been told that this type of document is not legal in the state of Florida. Any durable power of attorney would be effective at all times, not just if I were incapacitated. Theoretically, the designated agent could take complete control of all assets at any time. A suggestion is to set up a checking account including the name of the designated agent and keep a small balance, enough for the agent to pay a few months' bills if the need arises. Am I receiving accurate information and do you agree?
Answer: This reader asks whether there is any way in which a durable power of attorney can be included in her estate plan without giving the named attorney immediate control over all of her assets. The reader has explicitly requested this information about Florida law, but the question is one that can be important to readers in every state.
The type of power of attorney requested is called a springing power of attorney. That is, it comes into existence, "Springs" into use only if the person is incapacitated or incapable of acting. Florida law did not allow such a document until a few years ago, but now there is a specific statute that provides for such conditions. Each state has its own statutory requirements regarding the validity of powers of attorney, and it is necessary for any and every person who wants to have a valid power of attorney to be sure that the document is drafted in accordance with the laws of the jurisdiction in which he or she lives. It should also comply with the laws of any state in which property will possibly be transferred by use of the power of attorney.
Before deciding whether a springing power of attorney is advisable, the client should think carefully about the reasons for imposing conditions on its use. If the client is willing to allow the person holding the power to make decisions for her when she is unable to act for herself, either in a coma, or mentally disabled, the client would then think whether or not she should not give the power to the attorney while she is alive and well and can revoke it or even bring legal action against the attorney if it is misused. To put it another way, if I don't trust you when I am in complete control of my mind, why should I trust you when I am incompetent or incapacitated.
The durable power of attorney is an important part of any estate plan, and should be considered with the same care as the client and the client's attorney give to the naming of executors or trustees in a will, or the persons named as health care surrogates in a living will and health care proxy. Keeping a small checking account with an amount to cover a few months may be appropriate in some cases, but one can never tell whether the need to take charge of the principals affairs for a longer time, due to a long illness, will require that the named designated agent have more power than just the ability to write checks for a few months.
(Attorney Alan S. Novick is a wills, trusts and estates lawyer. E-mail estate planning questions to an304(at)aol.com.)
