How does a Florida power of attorney work?

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Here are 10 things to know about utilizing a durable power of attorney in Florida.

Principal:  Person giving the power of attorney to someone else.  Also called a grantor.

Agent:  Person given the power of attorney powers.  Also called an attorney-in-fact.

The agent is given the power of attorney by the principal.  The agent must act in good faith and solely for the benefit of the principal within the scope of the power of attorney. The powers given can be narrow and for a specific purpose, such as completing a real estate transaction, or they can be very broad.  In a Florida power of attorney agreement, the powers must be explicitly stated. Here are 10 things to know about power of attorney agreements in Florida:

1) Out of state power of attorney agreements. Out of state power of attorney agreements are valid in Florida if they were validly executed in the state where they were made.  However, a third party has the right to require a legal opinion from the state where it was executed proving it is valid. However, regardless of whether the power of attorney agreement was validly executed in another state, it must have been witnessed by two people and notarized to be effective for the transfer of real estate.

2) Powers must be specific. A power of attorney agreement must explicitly state the powers it is giving to the agent. A general statement that the power of attorney is giving the power to do "everything" the principal can do is not effective. Two exceptions are that if the power of attorney agreement gives the right to perform banking or investment activities, then some of those activities will be incorporated by reference to the Florida statutes.

3) Copies work. The law states that electronic transmission of copies of power of attorney agreements are effective.  However, it still may be required to record power of attorney agreements with the Clerk of Court if they need to be used for real estate transactions.

4) Ends at death. Even "durable" power of attorney agreements end at the death of the principal. It is unlawful to perform any actions as an agent under a power of attorney if you have knowledge that the principal had died.

5) Things you cannot do. Even with a valid power of attorney agreement, there are some things an agent cannot do. Some examples are: voting, executing or revoking a will, exercise a personal services contract, sign an affidavit on the principal's behalf, or act as a trustee or court-appointed fiduciary on the principal's behalf.

6) Effective immediately. You cannot have a power of attorney agreement in Florida that becomes effective at the incapacity of the principal (which is called a "springing" power of attorney).  A power of attorney agreement must take effect immediately.

7) Must be witnessed and notarized. A power of attorney agreement in Florida must be signed in the presence of two witnesses and notarized to be effective.

8) Magic words. Under Florida law, the power of attorney must state "This durable power of attorney is not terminated by subsequent incapacity of the principal except as provided in chapter 709, Florida Statutes", or something comparable, or it will no longer be effective if the principal is incapacitated.  This language makes the power of attorney a "durable" power of attorney.

9) Capacity is required.  To sign a power of attorney, the principal must have capacity. This means the principal must have a general understanding of what the power of attorney agreement is and what the legal effects of signing the power of attorney will be.  If the principal does not have capacity, then it is not valid.

10) Duty. The agent has a duty to act in good faith and solely for the benefit of the principal. The agent should not engage in any self-dealing or commit any waste of the principal's property.

A power of attorney agreement can be very powerful.  Conversely, if it is done incorrectly, it might be totally ineffective. It is a good idea to retain a competent attorney to make a power of attorney agreement.