POWERS OF ATTORNEY

We are asked many questions by individuals executing powers of attorney and by family members who receive these documents re­garding how the powers of attorney are to be used. We hope that this sum­mary will clarify some of these issues. We will always be glad to discuss specific situations and questions with you.

Q. What Is a Power of Attorney?

A. A power of attorney is a delegation of authority from one individual to another allowing that person to act on behalf of the donor. Under the common law, ordinarily, a power of attorney ceases to be valid if the donor becomes incapacitated. Florida and many other states have statutes which authorize the creation of a Durable Power of Attorney which will continue despite incapacity.

Q. When Is the Power of Attorney Effective?

A. This power of attorney is generally valid as soon as it is signed by the donor. Though it often is the intention of individuals executing the power of attorney that it not be used unless they become in­capacitated, legally it is effective the day it is signed. Therefore, the donor must have complete confidence that the indi­vidual receiving the power of attorney will use it appropriately only when necessary. Often, individuals ask us to hold all original powers of attorney in escrow unless contacted by a physician or family member that the document is actually needed in a specific situation.

An exception is the newly authorized (2003) Springing Power of Attorney which provides that it is not effective until your incapacity as evidenced by an attached Affidavit by your primary treating physician.

Q. Who Is the Attorney-in-fact?

A. The attorney-in-fact is the individual designated by the donor to act in his or her behalf. In many places, the document refers to "my attorney". This is not the lawyer, but the person named in the document to carry out he tasks as listed.

Q. What Are the Responsibilities of the Attorney-in-fact?

A. The attorney-in-fact stands in a fiduciary relationship to the donor of the power of attorney. If he misuses his authority, for example, by improperly transferring assets to himself or to others, then he could face liability for theft or fraud. The attorney-in-fact ultimately has a duty to account to the personal representative, the beneficiaries of your estate, as well as possibly to the Internal Revenue Service. There­fore, it is essential that precise records be kept. None of the assets of the donor and the attorney-in-fact should be commingled. To the (greatest extent possible, checks should be written for all finan­cial transactions so that a record will be available.

Q. What Does My Attorney-in-fact Need to Know in Using the Power of Attorney?

1. Documents signed by the attorney-in-fact should be ex­ecuted as follows:

John Donor

By: ____________________
Allen Agent
Attorney-in-Fact

2. If the attorney-in-fact executes documents as indicated above, he is signing in his representative capacity and will not have personal liability unless he has exceeded the authority given to him or has been negligent in carrying out his duties.

3. If a certified copy of the power of attorney is requested, for example, to transfer stocks, it may be necessary to have the power of attorney recorded with the Clerk of the Circuit Court. If we are hold­ing one of the originals, we will be glad to arrange this for you. There will be recording costs and a nominal processing fee.

4. Even though you have executed a durable power of attorney, some banks and brokerages additionally prefer that you execute power of attorney signature cards in the bank for your ac­­­counts and safe deposit box. We recommend that you check with your banks now about this to avoid problems for your attorney-in-fact in the future. If you have not done so and your attorney-in-fact encounters difficulty at a bank, we can often assist.

5. The most common situation in which you may encounter diffi­culty in using a power of attorney is for the sale of real property. Generally, title companies will not accept powers of attorney to convey homestead (real) property (your home) and are often reluctant to accept a power of attorney for many real property trans­actions.

Q. How Long Is the Durable Power of Attorney Effective?

A. Under Florida law, a durable power of attorney is valid until the grantor dies, is adjudicated incapacitated by a Court or revokes the power of attorney. It remains valid even if the donor be­comes totally incapacitated through a stroke or other illness. Some banks incorrectly take the position that they will not honor the durable powers of attorney more than 6 months old; there is no law in Florida to support that policy.

It should be recognized, however, that even though the durable power of attorney may be valid, there is no law requiring that it be accepted. Some banks and brokerage offices have their own policies which require their specific forms to be filled out prior to the attorney-in-fact being able to sign on checking or other accounts. You may wish to check with your bank or broker­age office regarding their requirements. If the attorney-in-fact experiences dif­­­­­­ficulty in using the document, we will be glad to offer our assistance.

Q. Were Will the Originals Be Kept?

A. We recommend executing duplicate originals of the power of attor­ney. Certainly, if they are need­ed in an emergency, the attor­ney-in-fact needs access. Therefore, we would recommend that they not be kept in the locked safe deposit box of the donor. Many of our clients choose to leave at least one of the originals with us so that if the attorney-in-fact lives out of state, arrangements can easily be made to display the power if it becomes necessary.

Q. Will the Power of Attorney Be Valid If I Move out of State?

A. The document recites that though the power of attorney is exe­cuted in the State of Florida, it is valid in whatever state in which it is presented. The majority of states have statutes which are similar to the Florida law and would honor the power of attorney.

Q. How Is the Power of Attorney Revoked?

A. A power of attorney should be revoked in writing and the attorney-in-fact should be notified of the revocation. In some circumstances it is prudent to record a copy of the revocation with the Clerk of the Circuit Court, as well as sending a copy to banks and other institutions which had a copy of the original document.

Q. How Can the Law Office of Timothy C. Schuler Help the Attorney-in-fact Perform His Duties?

A. One of the most important responsibilities of the attorney-in-fact is to account properly for all financial transactions. Therefore, it may be beneficial to have assistance with some of the clerical and administrative responsibilities which are in­­­­­­volved. Our firm has legal assistants and access to computerized accounting systems which may be of benefit in these tasks. We can provide book­keeping services including bill paying, check writing and the preparation of accountings. We also have access to information about support services and social agencies which may be useful.

This newsletter is designed to provide informative material of interest to our readers. Readers should not take or omit any action based solely on the basis of this newsletter as isolated circumstances may require action different from that described­ in this general orientation document. Appropriate legal advice or other expert assistance should be sought from a competent professional.