In Sunday School this week, we discussed the fact that as we get older we learn that we can’t always do the things that we used to do. We can no longer run (or even walk very fast) and we certainly can’t eat whatever we want without it showing. Also, as one gets older, a lot of us want to have someone else in a position to make decisions in the event that we are unable to carry on normal activities, either temporarily or permanently.
Florida Statutes provide for this process through a document known as a Power of Attorney. This power allows another person to act on behalf of the grantor of the power when the grantor is unable to act. It is sometimes confused with the very different concept of guardianship and the following example of the two may be helpful.
I like food analogies and I think my mother makes the best sweet potato pie in the world. So think of your personal rights as that pie. These include your right to buy or sell, contract with another, make healthcare decisions, etc...
A guardianship is where a Court takes your pie and gives it to someone else. The pie is still for your benefit but you can no longer enjoy that pie when you want it. It will be fed to you if, and when, the other party thinks you need it. A guardianship works the same way in that the Court takes certain rights of a person (known as the “Ward”) and gives them to someone else (the “Guardian”). The Ward can no longer sign a check or enter into a contract and ONLY the Guardian can do those things for the Ward. Guardianships typically occur when someone becomes incompetent and has no power of attorney and the Court has to appoint a guardian to care for the interests of the Ward.
On the other hand, a Power of Attorney is much different because it is more like you choosing to share your pie with someone. The person you choose (the “attorney in fact”) may get the access to your pie, again for your benefit. But you also retain the right to the pie yourself, as long as you’re competent. If the other person is feeding you at a rate or quantity that you like, you can still eat all the pie you want, with or without their approval.
There are three primary types of Powers of Attorney. But a fair description of each exceeds the length of this article so I will focus on the most common type: the Durable Power of Attorney.
This power lasts for the lifetime of the grantor and becomes void immediately upon the grantor’s death or upon a competent grantor revoking the power. It is also much less expensive and much less complicated than the guardianship process described above. But, the person holding the power may perform most legal acts that the grantor could with a few statutory exceptions. The exceptions are mostly things that require personal knowledge or skills of the grantor such as making an affidavit, voting, or making a will.
Another very important part of the Florida durable power of attorney is that, in most cases, such a power cannot be used to give gifts. This is a crucial part of the power because it helps protect the grantor from being taken advantage of by the attorney in fact using the power of attorney to transfer assets out of the name of the grantor into another’s name. It is very common for a bank to contact their legal counsel to review a power of attorney to see if there is authority for the attorney in fact to re-title bank accounts or certificates of deposit in someone else’s name; and usually the answer is no. Remember, the attorney in fact is placed in a fiduciary or trustee role and is to act in the best interests of the grantor of the power, not the recipient.