As a part of a comprehensive Florida power of attorney, the creation of a durable power of attorney is typically a necessary step. Regardless of the kind of plan you create, the specific estate planning goals you decide upon, or your circumstances, a good durable power of attorney is essential. Today we are going to look at some commonly asked questions about durable powers of attorney so you can get a better idea of what these tools are, what they do, and why you need them.
As always, if you ever have questions to which you cannot find the answer, feel free to contact us. While we regularly write blogs about a range of estate planning issues, nothing we write will ever be a substitute for the personalized advice and guidance we can give you.
Durable Power of Attorney: What is it?
It’s easiest to understand a durable power of attorney by breaking the term down into its component parts. A power of attorney is a specific kind of legal document. Through this document a person, called a principal, designates another person or organization as the principal’s representative. The representative is called an agent or an attorney-in-fact. (Hence the name power of attorney.) The agent, through the power of attorney, can make decisions and enter into agreements on the principal’s behalf just as if the principal him/herself was making them.
Powers of attorney come in many shapes and sizes, and with different limitations or abilities passed to the agent by the principal. A durable power of attorney is a specific kind of power that grants the agent the ability to act on behalf of the principal even after that principal loses the ability to make choices. Non-durable powers automatically rescind the agent’s authority upon the principal’s incapacitation, but durable powers extend the ability to act. This is why durable powers are so important for incapacity planning.
Durable Power of Attorney: What does a Durable Power of Attorney do?
A durable power of attorney is essentially a financial safety net. Through your power of attorney you can appoint an agent of your choosing who will have the legal ability to make choices for you, and represent your financial interests, should you lose your ability to make choices.
The agent/attorney-in-fact has a legal obligation to act only in a way that protects your best interests, and cannot use his or her authority to take advantage of you. Should agents abuse their authority they face significant legal consequences, including civil damages and even criminal charges.
Durable Power of Attorney: What is a Health Care Surrogate?
Durable financial powers of attorney are aimed at protecting your financial interests. But what about your health care interests? Can you create a durable power of attorney that gives an agent the ability to make health care choices for you in the event you lose capacity?
Yes. In Florida, a durable power of attorney for health care is called a health care surrogate. Through this form you, the principal, can designate someone as your chosen agent for health care decisions. Then, in the event you lose capacity, your agent will be able to make health care choices for you.
Durable Power of Attorney: What else do you need?
While durable powers of attorney and health care surrogates allow you significant, and vital, estate planning protections, it’s important not to believe that they constitute sufficient planning. In other words, you need more than a power of attorney or two to protect yourself fully.
A good estate plan will address incapacity planning concerns, and this is where powers of attorney are superb. But there are other issues your plan should address, such as inheritances, estate tax considerations, and questions about Medicaid. Powers of attorney do almost nothing to address these issues. For example, if you want an inheritance plan, you cannot simply delegate your inheritance choices to your agent under a durable financial power of attorney.
So, if you want a comprehensive estate plan, you need to be sure that your plan contains more than just powers of attorney. Further, the powers you create need to wok in conjunction with, or as a compliment to, any other tool you have.
If this all sounds confusing, or complicated, it can be. This is why it’s important to talk to us about your planning concerns before you make any estate planning choice. Scheduling an appointment to come talk to us abo your options is the best way to ensure that you get the most out of your estate planning experience.