Detailed Answer
A financial power of attorney (POA) is a written document that lets one person (the “agent” or “attorney-in-fact”) act on behalf of another person (the “principal”) for money and property matters. Under Florida law, a properly executed POA can grant broad authority to manage almost all financial affairs, and—if the document uses durable language—those powers can continue if the principal later becomes mentally or physically unable to manage finances.
Typical powers an agent can exercise (when the POA grants them) include:
- Banking and cash management: deposit, withdraw, endorse checks, open and close accounts, access safe-deposit boxes, and manage online banking.
- Bill payment and budgeting: pay recurring bills, mortgage or rent, taxes, and other household expenses.
- Investment and brokerage authority: buy, sell, and manage stocks, bonds, mutual funds, and other investments.
- Real property transactions: buy, sell, lease, mortgage, or manage real estate—provided the POA expressly grants those powers and any conditions for exercise are met.
- Business operations: run or make decisions for the principal’s business, sign contracts, and access business accounts (if the POA includes business authority).
- Tax matters: prepare, sign, and file tax returns, represent the principal before tax authorities, and handle refunds or assessments.
- Insurance and benefits: manage insurance policies, collect benefits, and handle retirement accounts, subject to any limits in the POA or by law.
- Claims and litigation: initiate, defend, or settle lawsuits concerning the principal’s property and finances, if authority is granted.
- Gifts and transfers: make gifts or transfers of the principal’s property to others—but gifting authority is often treated specially and should be expressly granted in the document if intended.
- Digital assets: access, manage, or close online financial accounts if the POA addresses electronic records and digital access.
Important Florida-specific points:
- Durability and incapacity: To remain effective after incapacity, the POA must include durable language (for example, words that clearly state the authority continues if the principal becomes incapacitated). Florida recognizes “durable” POAs and also allows so-called “springing” POAs that take effect only upon a future incapacity if the document states the triggering conditions and the method for determining incapacity.
- Execution formalities: Florida law requires a written POA to be signed by the principal (or by another at the principal’s direction), witnessed by two adult witnesses, and acknowledged by a notary public. Following these formalities helps ensure institutions accept the document.
- Express authority for certain actions: Some actions—especially making gifts, creating or changing beneficiary designations, or transferring certain types of assets—often require clear, express language in the POA. If you want the agent to carry out a specific transaction (for example, sell a home or make large gifts), include that authority explicitly in the document.
- Agent duties and limits: An agent owes fiduciary duties to the principal. That means the agent must act loyally, in good faith, in the principal’s best interests, keep records, avoid conflicts, and follow the principal’s reasonable instructions. The agent may not use the principal’s funds for the agent’s personal benefit unless the POA clearly allows it (and such use is lawful and recorded).
- Coordination with other documents: A financial POA does not replace a will, advance health care directive, or guardianship procedures. Health-care decisions require a separate health-care surrogate or advance directive. If a court later appoints a guardian for the principal, the guardian generally supersedes the agent’s authority over the same matters.
- Institutional acceptance: Banks, brokerage firms, title companies, and other institutions may have their own requirements for accepting a POA (they may ask for a recent copy, identification, or their own form). Recording a POA in the county public records is often required for real estate transactions.
Florida law that governs powers of attorney is found in Chapter 709 of the Florida Statutes. For the statutory text and detailed provisions, see the Florida Legislature: Florida Statutes Chapter 709 — Powers of Attorney.
In short: a financial POA can give an agent very broad authority to manage finances, but the scope depends on the exact language used. Durable language keeps the authority alive during incapacity. Certain acts require explicit authority in the document. Agents must follow strict fiduciary duties and many institutions will require proper execution and identification before acting on a POA.
Quick example (hypothetical): If a principal executes a durable financial POA that expressly authorizes real estate transactions, investment management, tax filings, and gifting, the named agent could sell a rental property, transfer sale proceeds to pay household expenses, invest the remaining funds in a brokerage account, and sign that year’s tax return for the principal—so long as the agent acts in the principal’s best interest and follows any limits in the POA.
Helpful Hints
- Choose an agent you trust. Consider naming one or two successor agents.
- Specify powers clearly. If you want the agent to handle real estate, business interests, or gifts, say so explicitly.
- Use durable language if you want the POA to survive incapacity.
- Sign the POA with two witnesses and a notary to meet Florida execution rules.
- Keep original signed copies and give copies to banks, brokerages, and your agent. Record the POA if real estate transactions are anticipated.
- Ask institutions in advance whether they have their own POA forms or acceptance requirements.
- Require the agent to keep thorough records and receipts of all transactions they make on your behalf.
- Review your POA periodically and update it if your situation or relationships change.
- Consider consulting an attorney to tailor the POA to complex finances, business ownership, or special gifting plans.
- If a dispute arises or you suspect misuse, contact a Florida attorney right away; the courts can remove an agent and provide remedies.