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DURABLE POWER OF ATTORNEY
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A durable power of attorney is a written document by which a person designates another to transact his or her business. The person granted the authority to transact this business is referred to as the "attorney in fact." The person granting this authority is known as the "principal." Unless otherwise stated, the durable power of attorney applies to any real or personal property interest owned by the principal. This includes the attorney in fact’s right to convey or mortgage the principal’s homestead.

Individuals and business institutions such as banks that are presented a valid durable power of attorney must honor the agent’s apparent authority to transact business for the principal. The right to rely on the agent’s authority to bind the principal ceases only when written notice is actually received that the durable power of attorney has been revoked, terminated, or suspended. A third party may, but need not, require the attorney in fact to sign an affidavit confirming that the durable power of attorney has not been revoked, terminated, or suspended at the time the durable power of attorney is being exercised. An individual or a business institution that in good faith relies on the agent’s apparent authority in the durable power of attorney is not liable to the principal for transacting business with the attorney in fact.

A durable power of attorney must be in writing and be signed by the person intending to create it in the presence of two adult witnesses and a notary public. The attorney in fact named in a durable power of attorney may transact business for the principal until the principal dies, revokes the power, or is determined by a court to be incapacitated. To ensure that the durable power of attorney is to be effective even when the principal becomes incapacitated, this document must contain the words, "This durable power of attorney is not affected by subsequent incapacity of the principal except as provided in s. 709.08, Florida Statutes"; or similar words that show the principal’s intent that the authority conferred is exercisable despite the principal’s subsequent incapacity.

If a proceeding is initiated in a court to determine the principal’s incapacity, the authority granted under the durable power of attorney is suspended until this petition to determine incapacity is dismissed or withdrawn. However, a court may determine that certain authority granted by the durable power of attorney may continue to be exercised by the attorney in fact even after the principal is determined to be incapacitated.

A durable power of attorney presently becomes effective as of the date it is signed. The existing Florida law does not presently condition the use of a durable power of attorney on the person signing this document subsequently becoming ill or incapacitated. Although many states previously adopted statutes permitting a power of attorney to be effective only upon specific events such as a subsequent incapacity, the Florida law has not previously recognized what is referred to as a "springing power of attorney."

The Florida statute governing a durable power of attorney was amended by this year’s legislature to permit a person to condition the effective date of a durable power of attorney upon his or her actually becoming incapacitated. This new provision takes effect January 1, 2002.This amendment to the Florida statute states that the durable power of attorney can be conditioned upon the person creating this durable power of attorney lacking the capacity to manage property as defined in the Florida guardianship statute. This definition means that a person lacks the capacity to take those actions necessary to obtain, administer, and dispose of real and personal property, intangible property, business property, benefits and income. While a judicial determination that this person lacks the capacity to manage property will not be required, the new statute states that this "springing power of attorney" can only be exercised upon the delivery of the treating physician’s affidavit to the third party such as a bank. This affidavit must state that this physician is licensed to practice medicine in the state of Florida, that he or she is the primary physician who has the responsibility for the treatment and care of the person who created the durable power of attorney, and that the person creating the durable power of attorney lacks the capacity to manage property as defined in the applicable Florida guardianship statute. The amendments to the durable power of attorney statute state that a physician who makes a determination of incapacity to manage property pursuant to this new law is not subject to criminal prosecution or civil liability and is not considered to have engaged in unprofessional conduct as a result of making such determination, unless it is shown that the physician making the determination did not sign the affidavit in good faith.

A third party such as a bank may rely upon the authority granted in a durable power of attorney that is conditioned on the principal’s lack of capacity to manage property only after receiving this physician’s affidavit which must have been signed by the physician within six months prior to first receiving it. The person named as the attorney in fact must also give the third party such as a bank an affidavit stating where the person who signed the power of attorney permanently resides, that this person is not dead and there has been no revocation, partial or complete termination by adjudication of incapacity, or by the occurrence of an event referenced in the durable power of attorney, or suspension of the durable power of attorney by initiation of proceedings to determine incapacity or to appoint a guardian.

The "springing durable power of attorney" will give a person an alternative to granting his or her attorney in fact the immediate right to take control of the principal’s property. However, a person creating this new type of durable power of attorney must understand that delays may arise in obtaining the treating physician’s affidavit. In addition, a new affidavit must be obtained from the treating physician if the physician’s certificate is not presented to the bank or third party within six months of the date of the initial physician’s affidavit. These new provisions in the statute do not change a person’s right to continue to have a durable power of attorney which is effective immediately.

Prior to October 1, 1995, the person intending to transact business with the agent first had to conduct an investigation to ensure that no incapacity proceeding had been commenced and that the power of attorney had not been revoked. This requirement made banks and some individuals reluctant to transact business with agents named in a durable power of attorney. Often an important business transaction was delayed while a thorough investigation was made to determine the competency of the principal or that the durable power of attorney had not been amended or revoked.

In 1995, the durable power of attorney statute was revised to state that until a person receives written notice that the durable power of attorney has been revoked, terminated, or suspended, a person may transact business with the agent and rely on the agent’s apparent authority to transact business. The revisions to this statute further authorize the bank or person transacting business with an agent to request the agent to sign an affidavit confirming that the durable power of attorney had not been revoked, terminated, or suspended as of the time the agent is transacting business on behalf of the principal.

The 1995 revisions also provide that if a person unreasonably refuses to allow the agent to transact business on behalf of the principal and a lawsuit must be filed to enforce the rights of the agent, the prevailing party in the action is entitled to damages and costs, including reasonable attorney fees.

These revisions apply only to durable powers of attorney signed on or after October 1, 1995. It is important for persons who signed a durable power of attorney before that date to sign a new one after October 1, 1995, to ensure that the agent will have all the rights and privileges provided by this new statute.

This page is excerpted from the Florida Senior Legal Guide. Disclaimer.