DISCUSSION IN THE SOCIAL HALL AT

VALENCIA RESERVE IN BOYNTON BEACH, FLORIDA

ON JANUARY 5, 2012 .

 

 

 

RETIREES SHOULD THINK TWICE BEFORE SIGNING A NEW FLORIDA DURABLE POWER OF ATTORNEY

 

           

            When most retirees move to Florida, they obtain a Florida driver’s license, Florida registrations for their cars, obtain a homestead exemption and register to vote in Florida.  Another item on their checklist is often to execute new Florida estate planning documents, including a Florida Durable Power of Attorney.

            Every retiree should be concerned that at some point prior to their death they might suffer some form of dementia or other mental impairment that may make it difficult or impossible to manage their affairs.  That is why most estate planners encourage a retiree to sign a Durable Power of Attorney and give authority to a spouse, one or more children, or a trusted friend to manage their affairs if they are unable to do so.  The alternative is to have a court appointed guardian handle affairs with the expense, delays and publicity that may result from such judicial intervention.  Implementing a Durable Power of Attorney, on the other hand, is a less expensive, expeditious, private and  more informal approach to satisfy an impaired retiree’s needs.

            Powers of Attorney have been around for a long time. Under English common law, when a person was going to take a voyage to another country, he or she would often  sign a legal document granting the right to a trusted friend or relative to manage affairs in his or her  absence. It could be as simple as granting the right to do everything that the person going on the trip could do if he or she continued to be present in England or a more specific authorization to perform only specified acts in a particular manner.  The use of Powers of Attorney have been commonplace throughout the United States, including Florida. One big drawback was that the Power of Attorney terminated when the principal who signed it either died or became mentally impaired.

                                                                                                                                                                        About 35 years ago, at the urging of estate planners and others, most states passed legislation that provided that the Power of Attorney, if it so stated in the document, would not terminate when the principal became mentally impaired but would continue to be effective until death. Such a document was called a Durable Power of  Attorney and its use as an estate planning tool became very common, avoiding in many instances the appointment of a guardian by the court during the period of mental impairment.

            Now let’s focus on the recent changes made in Florida law relating to Powers of Attorney. We will not be discussing Health Care Advance Directives or Health Care Surrogates but rather Agents that are appointed by a retiree to assist in managing financial affairs and property.

            We will be discussing the type of new Power of Attorney that is durable and gives as much authority as possible to the Agent to act under the new law. This basically includes the power to do everything the retiree could do himself or herself except vote, make out a new will, act as a fiduciary for someone else, perform personal services that the retiree would otherwise perform and other limited acts. 

            I would like to address why some retirees should think twice before signing a new Florida Durable Power of  Attorney. Under prior Florida law, the Durable Power of Attorney was exercisable by the Agent as of the date of execution unless it provided that it was conditioned on the retiree’s lack of capacity to manage property. In that case the Durable Power of Attorney was only exercisable when and if an affidavit was signed by the retiree’s primary physician. The affidavit was required to confirm that the physician has the responsibility for the retiree’s treatment and care and state that to the best of the physician’s knowledge, after reasonable inquiry, the physician believes that the retiree lacks the capacity to manage property.  “Manage property” is defined as those actions necessary to obtain, administer and dispose of real and personal property, intangible property, business property, benefits and income. 

  Such a provision in the old Florida  Power of Attorney, i.e. that it became effective only if and when a determination was made of the retiree’s incapacity to manage property, is commonly referred to as a “springing” option.  Many retirees prefer to have a “springing” option in the Power of Attorney so that he or she remains in full control unless and until a physician makes a determination of incapacity.

            The Legislature has now mandated that any Power of Attorney signed after October 1, 2011 that contains a “springing” option is entirely invalid.

            The “springing” option allowed under the prior law provided a failsafe mechanism to assure that there would not be any undue meddling by any family member or friend that was named as an Agent in the Power of  Attorney unless and until the retiree was indeed unable to manage his or her affairs.

            The new law specifically provides that a new Power of Attorney is ineffective if the Power of Attorney provides that it is to become effective only upon the occurrence of a future event or contingency.  In other words, the Power of Attorney is invalid if it provides that the powers given to the Agent to act on the retiree’s behalf only become effective if and when the physician determines that the retiree is no longer able to handle their own affairs. As a practical matter, this means that the Agent designated is empowered to “take over” immediately after the retiree executes the Durable Power of Attorney without any prior consultation with the retiree or any physician.            Many of you are former New Yorkers and your last Durable Power of Attorney may have been signed in  New York. New York law is directly the opposite that of Florida, If a Power of Attorney provides that it to become effective only upon the occurrence of a contingency such as an opinion of a physician that a retiree does not have the mental capacity to manage his or her own affairs , it is only effective when the contingency occurs.

 

Let’s assume a scenario that might occur to illustrate why a retiree should THINK TWICE before executing a new Florida Power of Attorney.

·         Paul and Annette have recently retired and moved into a home in Valencia, an age 55 and older residential community in Palm Beach County.  They previously lived near their son and daughter in New York City.  They opened a checking and savings account at a nearby bank and a securities account at an nearby brokerage firm.

·         They recently executed Wills that provide that on the death of either of them, all assets pass to the survivor; and on the death of both of them, all assets are divided equally between their two children.  They both signed a Power of Attorney and Health Care Proxy that appoints each other to serve; and if not surviving, then first the daughter and then the son is to act.

·         Fast forward 15 years.  Annette has died and Paul has been living in the Florida home and experiences SENIOR MOMENTS (sometimes referred to as a BRAIN FREEZE) and is no longer as mentally alert as in his younger days.  The daughter still lives up north.  She occasionally comes down to Florida to visit.  After the last visit, she decides that it would be in her father’s best interest to move into an assisted living facility.  Her father wants to continue living in the home.

·         At his next physical, Paul discusses the matter with his physician who suggests that he continue living in his home and manage his own affairs the best he can.  The doctor suggests that he consider retaining an accountant to help him with his bookkeeping and a “helper” to assist him a few hours each day at home. 

·         The daughter loves her father and wants to protect him.  The problem is that she is OVERPROTECTIVE.  She encourages her father to join some friends on a Caribbean cruise.  While he’s away, she takes matters into her own hands.  She activates the Florida Power of Attorney that no one has looked at for 15 years and gives a copy to both the bank and brokerage firm.  She then arranges for a sale of the Florida home, places some of the furniture in storage and moves the remaining belongings to an assisted living facility.  WHAT A SURPRISE WHEN PAUL RETURNS FROM HIS CRUISE!

·         There is no question but that the daughter is acting in good faith and believes what she is doing is in her father’s best interest and what her parents would have reasonably have expected her to do under the present circumstances when they signed their Powers of Attorney.

            WHO WINS?  Probably the child.  Although Paul may not have fully thought out all of the consequences when he signed the 15 year old Power of Attorney, he did sign it and authorized his daughter to do what she did with no pre-conditions.  True, by signing the Power of Attorney, Paul did not give up the right to act on his own behalf with respect to all the powers he gave to his daughter so long as he remained competent to do so.  But is he still competent?  His personal physician thinks so.   A fight with the daughter is apt to trigger a guardianship proceeding in Court with all the uncertainties that it entails and there is a good chance that Paul  will not be able to undo what the daughter has already done.

            There are multiple forms of dementia that may impair to various degrees the ability of a retiree to manage his or her affairs.  As longevity increases due to medical advances, a retiree is more likely to experience some form of mental impairment prior to death.  The length of time between the onset of some form of dementia that does not significantly impair mental ability to manage one’s affairs to the time when it is obvious to all that such impairment exists, may vary from a few days to several years.  Under Florida’s new law, there is no timeline drawn as to when a retiree can no longer act on his or her own behalf and when an Agent should begin acting on behalf of the retiree.  Under the old law, by invoking the “springing” option, such a timeline could be established.  Now, with the elimination of the “springing” option, the Agent (for whatever reason) can, as a practical matter, cause the takeover of control to occur at an earlier date. 

Some will contend that if a retiree selected an Agent to protect his or her interest at a later date, the retiree should have sufficient confidence that the Agent will act in his or her interest commencing with the date that the Power of Attorney is signed.  In other words, any Agent who can be trusted to act for the retiree under a “springing” option should be trustworthy enough to hold an immediate power.  But as pointed out in the father/daughter example above, the issue remains that an emotionally involved Agent may be OVERPROTECTIVE and substitute their judgment for that of an objective, qualified professional..

            Nor does the argument that if one can be trusted later, one should be trusted sooner, take into account that a significant number of retirees may prefer the “springing” option to maintain privacy.  In order to act appropriately from the date the Power of Attorney is signed an Agent needs access to financial information that might not have theretofore been disclosed.  On the other hand, by utilizing a “springing” option that information can remain undisclosed until the option is triggered, or if never triggered, until death.

            The best outcome would be for the Legislature to amend the New Power of Attorney Act to allow a “springing” option to be inserted in a new Power of Attorney to protect retirees if they so choose.  By so doing, the Legislature would be following the recommendation of the National Conference of Commissioners on Uniform State Laws that approved and recommended for enactment in all states a Uniform Power of Attorney Act.  The Uniform Act provides that a retiree may provide a “springing” option that permits the Power of Attorney to become effective only upon a physician’s certification that the retiree is unable to manage property or business affairs.

Some may point out that the Power of Attorney serves two purposes: (1) it permits the Agent to perform necessary services before any impairment and (2) it permits the Agent to perform necessary services after the impairment sets in. They claim the “springing” option lessens the utility of the Power of Attorney because it eliminates the first purpose. But the widespread use of overnight mail, faxes, document scanning and emails make it highly unlikely that there will be any need to utilize the Power of Attorney for the first purpose.

Under the prior law, if there was a need to authorize an Agent to perform specific acts, then a separate Power of Attorney could be executed. For example, if a retiree wanted someone else to be authorized to assist in banking transactions while he was still mentally competent, the retiree could execute a bank power of attorney.

 

Why Did The Legislature Outlaw the “Springing” Option?

 

            Prior to the enactment of the new law, the Florida Legislature formed a Power of Attorney Committee that was charged with the task of evaluating the then recently promulgated Uniform Power of Attorney Act for possible enactment in Florida.  This Committee  comprised  attorneys in practices in several disciplines, including estate planning, estate and trust litigation, elder law and family law, as well as those who worked for financial institutions, those who represent the Florida Banker’s Association and those whose practice relates to real estate title insurance.  The Committee overruled the recommendation of the National Conference of Commissioners on Uniform Laws and recommended prohibiting the use of a “springing” option.

            In a footnote to a so-called “White Paper” filed with the Legislature by the Committee prior to its enactment of the new legislation, it states that the rationale for eliminating the “springing” option rests with the collective experience that “springing” powers are fine in theory, but bad in practice.  It states that in theory, they address the reluctance principals have to an instrument that authorizes an agent to act on a principal’s behalf while the principal still has capacity to act for his or her own self.  However, it points out that in practice, uncertainty about whether or when principals lose capacity has made “springing” powers problematic, both for agents who seek to exercise them and for financial institutions and other third parties who are asked to honor them.   The White Paper states that, on balance, the Committee believes that the reluctance of principals is better addressed by other means.

             The White Paper suggests  an acceptable “other means” approach under the old law used by some attorneys to escrow the Power of Attorney. The attorney would retain the Power of Attorney for release to the agent only if requested by the retiree to do so at a future date or when the attorney received information that the attorney considered reliable that the retiree is unable to handle his or her affairs at that time or in the foreseeable future because of a mental or physical disability.  Such “other means” may have been a reasonable approach under the old law. However, it would appear that such action runs directly contrary to the new law itself that states that the Power of Attorney is ineffective if it provides that it is to become effective at a future date or upon the occurrence of a future event or contingency.  Is not the release of the Power of Attorney such a future event or contingency? Some may contend that the new Act is not violated because the contingency is not spelled out in the Power of Attorney itself, but in separate escrow letter or other document. But at least some attorneys may conclude the law is being circumvented by such  an escrow arrangement and not continue that practice. (Where the retiree has an arrangement with an attorney to hold an old power of attorney pursuant to an escrow arrangement, it would seem that the new law would not make that inappropriate going forward because the language in the new law that prohibits springing powers does not apply to old powers of attorney.)

 

            Such “ other means” was probably also referring to estate plans that include  a funded revocable trust that is often referred to as a Living Trust. By executing a Living Trust where the retiree is both the sole grantor and the sole trustee, the retiree maintains control of the assets funding the trust so long as the retiree remains competent to act as trustee. When it is determined pursuant to the trust agreement by a physician or other designee that the retiree is no longer competent to so act, the successor trustee named in the document takes over. Although this is akin to a “springing” option it is permissible under Florida Law. In some respects, it is favored over a Power of Attorney because the Trust continues on after the death of the retiree whereas a Power of Attorney terminates on the death of the maker.  The problem is that the retiree only maintains control over the assets actually transferred to the trust. The typical Durable Power of Attorney contains many powers that are simply not appropriate for a Living Trust Agreement.

            So, if there are no obvious acceptable “other means” outside of the Act to effectively protect a retiree short of a formal court administered guardianship why was the Committee so anxious to outlaw the “springing” option?

            The representatives of the banks and other financial institutions were hostile to any contingent powers presumably because it required them to look outside of the four corners of the Power of Attorney itself and make a judgment as to whether or not the contingency was satisfied. There was a similar concern by some of the real estate practitioners on the Committee.

            Although not stated in the White Paper it appears that the primary concern of the Committee was the inability to obtain the physician’s affidavit referred to in the old law. As mentioned above the primary physician had to sign the affidavit and often were general or family practitioners. Many felt they were not qualified to render an opinion as to a patient’s mental status and refused to do so because of liability concerns and did not find the “hold harmless” provisions sufficient because they would still have to appear in court. The Committee apparently concluded that the prior law was misleading the general public to believe that the “springing” option was a viable option when, in actual application, it was not. If the affidavit was not made available, the old Power of Attorney never became operative forcing the retiree’s family to resort to a formal court guardianship.

            Rather than throw out the baby with the bathwater, the Committee should have preserved the “springing” option but changed the old law to permit any physician or licensed psychologist to make the determination if the retiree chooses to include such provision in his or her Power of Attorney. This was the approach recommended by the National Conference of Commissioners on Uniform State Laws.

 

SO WHAT SHOULD THE RETIREE DO==SIGN OR NOT SIGN?

 

Although the Florida Power of Attorney Act prohibits the use of a “springing” option, it has a new provision not found in the old law that provides additional protection to the retiree.  The new provision states that in exercising any authority granted in the Power of Attorney, the Agent may not act contrary to the retiree’s reasonable expectations actually known by the Agent.  So that there can be no question that the retiree’s expectations are actually known by the Agent, it is  suggested that the retiree consider signing and delivering to the Agent and any Successor Agents a Statement of Expectations and have the Agents confirm  by also signing the Statement that  they have reviewed such expectations and will not act contrary to such expectations. 

 

            The following is a rough draft of what the Statement of Expectations might look like:      

 

 

 

My Expectations

 

 

TO:      My Agent and Successor Agents named in my Florida Power of Attorney

 

 

             I am signing this document to express my expectations as to how you will carry out your duties as my Agent.

 

 

 

It has been pointed out to me that under Florida law, you must not only act within the scope of authority granted to you in my Power of Attorney, but in exercising that authority, you may not act contrary to my reasonable expectations actually known by you.  That is the reason why I have signed this document and request that you also sign it to confirm that my expectations set forth below are actually known by you and that you will carry them out. 

           

           

            It is my  expectation that you will use great restraint in exercising your powers when I am only partially incapable of caring for my own needs and will permit me to participate as fully as possible in all major decisions affecting me and will exercise your powers in such a manner as to assist me in regaining my ability to the maximum extent possible and that you will accomplish these objectives through providing me with a form of assistance that least interferes with my legal capacity to act on my own behalf; and it is my expectation that the powers granted to you will be liberally construed by you to accomplish this purpose.

 

It is my further expectation that you will exercise your powers  to allow me to remain in my home (and not be admitted to an assisted living or nursing facility) so long as I am able to do so and to assist me in obtaining whatever additional assistance is necessary to permit me to stay in my own home.

It is my desire, expectation and request that the foregoing apply to all durable powers of attorney executed already or hereafter executed by me that have not been revoked and irrespective of where I was or am domiciled at the time to the extent permitted by applicable law.

 

            Thank you for undertaking the responsibility of being named an Agent under my Power of Attorney.

           

 

                                                                                                                                                                       

 

            The above is only a draft and a retiree with the guidance of an attorney may wish to revise it substantially. Caution should be exercised.  The more detailed the expectations are, the less flexibility the Agent has to take into account changing circumstances not anticipated by the retiree.

            But there is problem. Most retirees expect that even though the Power of Attorney becomes effective on signing that it will not be exercised unless and until he or she shows at least some signs of mental impairment or the retiree specifically requests that it be exercised for a limited purpose prior to such time. Yet does not this run counter to the outlawing of a springing Power of Attorney. There is the probability that the Courts will address this irreconcilable conflict in the Act and possibly declare that any such expectation renders the entire  Power of Attorney ineffective.

The provisions in the new law that mandate that the Agent not violate the reasonable expectations of the retiree applies not only to new Powers of Attorney but also existing ones. If the retiree has an old Power of Attorney and keeps that document in force, the Statement of Expectations would limit the exercise of the powers in existing Powers of Attorney and safeguard the retiree against the overprotective agent (like the daughter in our example). So one suggestion might be to sign a Statement of Expectations that applies equally to new as well as old Powers of Attorneys but simply not sign a new Power of Attorney. There would be no problem with the Court addressing the issue because the old law did not prohibit the delayed exercise of powers.

The new Florida law provides that all existing powers remain valid even if they contain a “springing power”. So why should a retiree sign a new Florida Power of Attorney form? The reason is that the new Power of Attorney form is apt to contain additional provisions that provide greater flexibility in estate planning that are not found in the older forms. Under the new law, extraordinary powers are enumerated that should be discussed with the retiree’s attorney and a decision made as to which should be included. Because they are extraordinary they must be separately initialed to be effective. It may be advisable to grant one or more of these powers to the Agent. For the most part, these extraordinary powers  provide useful tools to augment more sophisticated estate planning techniques to reduce estate and income taxes that normally could not be implemented by an Agent under the old form because the Agent (very often a spouse or child of the retiree) may have a conflict of interest in doing so.

 

Unless and until the springing option is restored to the new law or there is further clarification by the Courts the best approach by the cautious retiree would appear to be to take the following steps:

·         Sign a new Power of Attorney

·         Keep the old Power of Attorney also in effect

·         Sign a Statement of Expectations  

 Florida laws allows multiple Powers of Attorney to remain in effect until revoked. The retiree who has an old power of attorney, whether or not it contains a springing provision, may find it advisable to sign a new power of attorney that contains expanded powers to facilitate more sophisticated estate planning techniques even though the old power of attorney continues to be valid.

As previously discussed, it may be important to keep the old power of attorney in effect. Think about the following  scenarios:

·         (1)The retiree writes on the new power of attorney “ Not effective unless and until my physician determines I am not mentally capable of managing my affairs”

·         (2)The retiree writes on a paper stapled to the new power of attorney “Not effective unless and until my physician determines I am not mentally capable of managing my affairs”

·          (3)The retiree writes on the power of attorney or on a paper attached to the power of attorney “ It is my expectation that my  agent will not use this power of attorney until my physician determines I am not mentally capable of managing my affairs”

·         (4)The power of attorney states that the agent shall not exercise the power to sell the retiree’s home or withdraw any funds from a bank account unless and until a physician determines that the retiree is not mentally capable of managing his or her affairs.

·         (5)A separate Statement of Expectations states that the retiree expects that the agent will not exercise the power to sell the retiree’s home or make any major decisions  unless and until a physician determines that the retiree is not capable of managing his or her affairs.

·          (6)A separate Statement of Expectations is identical to the one we previously discussed.

Under the new Florida Law under certain circumstances a bank may require that the agent provide a legal opinion that the agent has the right to enter into the proposed transaction. Will the retiree’s lawyer be willing to furnish an opinion that the power of attorney is effective?

 Certainly not as to scenario (1) because the new law states the power of attorney is ineffective if it only becomes effective upon the occurrence of a future contingency and the insertion was made on the power of attorney itself.  But what about (2)? Is the attachment a part of the power of attorney? Not technically.

 What about scenario (4)? Here only certain powers are ineffective at the outset and only become effective upon the occurrence of a future contingency, not all of them. An attorney may not want to take the risk of furnishing an opinion under these circumstance because the perceived intent of the legislature could be defeated by simply allowing some innocuous power to take affect immediately and to defer the exercise of the remaining more important powers until the occurrence of a contingency.

What about scenarios (3), (5) and (6)? As previously mentioned the new Florida law states that in exercising any power the agent may not act contrary to the reasonable expectations of the retiree, known to the agent. As a practical matter do not each of these three scenarios defer or limit the power of the agent to act with respect to at least certain powers until the occurrence of a future contingency relating to the extent that the retiree is able to manage his or her affairs? May not the lawyer be reluctant to render a favorable opinion under these three scenarios and even be reluctant to prepare a statement of expectations for the retiree-client in the first instance with respect to which he may not be prepared to render a favorable opinion at a later date?

 

          If the Legislature does not clarify what it intended, the issue will probably be resolved by the Florida courts.  A court opinion is likely to adopt one of the following two arguments:

1.                  The language of the law is clear. So long as the Power of Attorney itself does not state it is to become effective upon the occurrence of a future contingency, the retiree can delay its effectiveness, either by an escrow arrangement with an attorney or by stating his or her expectation that it not become effective until the occurrence of a future contingency, such as a determination by his or her physician that he or she should no longer act on their own behalf. (Such a construction of the statute will recognize and protect the rights of retirees who are partially incapable to manage their own affairs and desire the least restrictive form of assistance)     OR (just the opposite) the court might adopt the following argument:

2.                  The intent of the Legislature is clear that no springing powers are allowed  and that the retiree cannot circumvent such intent by either an escrow arrangement or a Statement of Expectations.  The requirement that the agent must not act contrary to the principal’s reasonable expectations applies to the manner in which the powers can be exercised commencing when the above Power of Attorney is signed, not the timing or manner of executing the powers at a subsequent date. (This construction of the statute would be welcomed by the financial institution since they then would be able to assume that the powers in any Power of Attorney presented to them were effective when signed and they need not explore any  attempt to delay its effectiveness by the retiree.)

            But the problem is that it is likely to be several years before this issue is resolved by the Florida courts. THIS IS WHY IT IS SO IMPORTANT TO KEEP THE OLD POWER OF ATTORNEY IN EFFECT AS WELL AS THE NEW ONE.

            Here is some good news. Under the old law, banks often refused to recognize a power of attorney presented to them for a variety of reasons. Under the new law, banks and other third parties must accept powers of attorney except under very limited circumstances and can be penalized if they do not do so. In return, banks and certain others are relieved of any liability if they act in good faith in accepting a power of attorney even though it later turns out to be defective. They are given sufficient time to have the power of attorney reviewed by their legal staff and, as previously mentioned, under certain circumstances can require an attorney’s opinion to be furnished at the retiree’s expense.The legislature was rightfully concerned with limiting bank liability. But in one respect it went to far.

Here is some bad news. Assume that you are a retiree with a Florida bank account. You open your mail and look at your bank statement. There is a very large withdrawal that you know nothing about. You drive over to the bank and the bank officer shows you paper work consisting of a power of attorney, withdrawal slip and other documentation that it relied on in withdrawing the funds from your account.  They are all forgeries. You never  executed any power of attorney, let alone this one. You never heard of the  agent listed on the forged documents or the payee of the funds. The bank acted in good faith and never suspected that anything was wrong. You want the bank to return the funds to your account. The bank officer tells you to hire an attorney and go after the forger and that it has no liability.  The bank is right. The new law says the bank has no liability for forgeries that it accepts in good faith, but is that fair? I don’t think so. The bank was the only one that had contact with the forger. Maybe it should have called you on the phone to verify that everything was ok or take some other steps to protect you.  It should have at least warned you and all other depositors that this could happen under the new law and give you an opportunity to move your account elsewhere. The bank should make your account whole and try to locate the forger and collect, if it is lucky.

 

            The new law contains 29 separate sections, many of which contain subsections. In this presentation I have only touched on those that I thought you would find most interesting and have focused on the utilization of a Durable Power of Attorney during the time that  retirees may be only partially incapable of managing their affairs.

            With respect to guardianships the Legislature found that it was desirable to make available the least restrictive form to assist persons who are only partially incapable of caring for their needs and recognized that every individual has unique needs and differing abilities. The Legislature declared that it was its purpose to promote the public welfare by establishing a system that permits incapacitated persons to participate as fully as possible in all decisions affecting them; that assists such persons in meeting the essential requirements for their physical health and safety, in protecting their rights, in managing their financial resources, and in developing or regaining their abilities to the maximum extent possible; and to accomplish these objectives through providing, in each case, the form of assistance that least interferes with the legal capacity of a person to act in her or his own behalf. This legislative intent should equally be applicable to the recent laws enacted for Powers of Attorney. Hopefully the legislature will fine tune its recent legislation to meet these objectives for retirees who are only partially incapable of managing their affairs. I am not aware of any other jurisdiction that has a law that unequivocally states that a power of attorney is ineffective if its effectiveness is based on a future contingency. That provision is apt to seriously compromise the intent of the legislature to allow incapacitated retirees to participate as fully as possible in all decisions affecting them and should be repealed.

           

 

            Before I close and open the floor for questions, let me give you an update on Paul. You will recall he had a BIG SURPRISE when he returned from his cruise. He decided not to fight his daughter and stayed in the assistant living facility for three years and then was moved into a nursing home. I am sad to report he died shortly thereafter. When the attorney for his estate, read his will to his son and daughter that he signed shortly after he returned from the cruise, his daughter was now in for a BIG SURPRISE. Let me close by quoting from a portion of his Will:

 

                        My wife Annette always wanted our daughter to have her jewelry and to carry out her wishes I bequeath all jewelry to her. Annette and I always had great love and affection for her children (our grandchildren), and I bequeath $100,000 to each of them. My daughter gave me her big surprise when I returned from my cruise and I would like to reciprocate with my own BIG SURPRISE. I give, devise and bequeath  all of my bank accounts and securities and all my other assets to my son outright with the request that he consider giving some small portion of those assets to my daughter in his sole discretion if it ever becomes necessary for her to have additional assets in her old age so that she will be able to afford additional assistance in her own home and not be forced, as I was by her, to move out..

 

 

                        I hope you found this discussion informative. To my knowledge, no one else has criticized this new law but hopefully my discussion paper will encourage others to more critically analyze its effect on the right of retirees to participate as fully as possible in all decisions affecting them. I prepare quite a few wills and other estate planning documents for  my clients. Unless it is amended as I have suggested, the new Florida Power of Attorney Act will continue to make me as well as my clients think twice when we discuss powers of attorney. You should think twice as well before signing a new Florida Power of Attorney. Thank you.

                       

             

 

 

WARNING:  THE ABOVE DISCUSSION SHOULD NOT BE VIEWED AS LEGAL ADVICE OR CONSULTATION BUT RATHER AS A GENERAL DISCUSSION TO ASSIST THE RETIREE AND HIS OR HER ATTORNEY WHEN THEY REVIEW TOGETHER THE ADVISEABILTY OF EXECUTING A NEW FLORIDA POWER OF ATTORNEY.  IT IS NOT INTENDED AS A SUMMARY OF THE NEW LAW AND SEVERAL  FEATURES ARE NOT DISCUSSED. 

 

 

 

 

 

                        Allan R. Lipman is a Phi Beta Kappa graduate of Syracuse University and a graduate of the Harvard Law School where he was an editor of the Harvard Law Review.  He served as research counsel to the New York State Commission on the Revision of the Law of Estates and authored several of the practice commentaries in McKinney’s annotated New York Surrogate’s Court Procedure Act.  He has written articles and lectured extensively on estate planning.  He is a Fellow of the American College of Trust and Estate Counsel and a member of both the New York and Florida Bar and practices law in Erie County, New York and Palm Beach County, Florida.  Please send any comments to al@alipman.com.