Durable powers of attorney: a less restrictive alternative?

• Author: Smith, Katherine L.
• Position: Florida

The viability of Florida's durable powers of attorney was put into question by Peter B. Tiernan in his article entitled "Florida Durable Powers of Attorney, Exploring the Limitations of an Agent's Authority."(1) According to Mr. Tiernan, as a result of the 1995 revisions to F.S. 709.08, which governs durable powers of attorney ("DPOAs'), an attorney-in-fact is substantially limited in the powers he or she may perform on behalf of a principal. Mr. Tiernan contends that standard provisions routinely contained in a DPOA are not enforceable without court intervention. However, the legislative intent behind the creation and later amendments to F.S. [section] 709.08 and the weight Florida's courts have given to express provisions of a duly executed DPOA need to be considered. (2) This article will argue that a properly drafted and duly executed DPOA can, without the need of court intervention, assist potentially disabled or incapacitated persons in handling their legal, business, and property affairs.

Legislative History

F.S. [section] 709.08 has evolved substantially since 1974, when Florida's legislature first created the durable family power of attorney ("DFPOA") (3) to provide family members a means to "help a potentially disabled or incompetent person in handling that person's legal, business and property affairs." (4) Originally, only the principal's spouse, parent, or child, whether natural or adopted, qualified to act as an attorney-in-fact under a DFPOA. (5) Gradually, the class of persons qualifying to act as an attorney-in-fact under a DFPOA was expanded to those "related to the principal by lineal consanguinity, whether natural or adopted." (6) The DFPOA was replaced in 1990 with a general DPOA. (7) However, the 1990 revisions failed to specify who qualified to act as an attorney-in-fact under a DPOA. Presumably, any person who was at least 18 years of age and of sound mind qualified as an attorney-in-fact under the Florida's original DPOA.

Finally, in 1995, F.S. [section] 709.08 was substantially revised to provide that any person at least 18 years of age and of sound mind, a financial institution (as defined by F.S. Ch. 655) with trust powers, conducting and authorized to transact business in the State of Florida, or a not-for-profit corporation, organized in the State of Florida for charitable or religious purposes, which qualified as a court-appointed guardian prior to January 1, 1996, and which is a tax-exempt organization under [section] 501(c)(3) of the Internal Revenue Code of 1986, as amended, is qualified to act as an attorney-in-fact under a DPOA. (8) The 1995 revisions also gave third parties, acting in good faith, a basis to rely upon a DPOA and provided practitioners with the first statutory guidance as to the powers which may be conferred upon an attorney-in-fact and the limitations of such powers. There have been several revisions to F.S. [section] 709.08 since 1995, including the enactment of legislation allowing for a springing DPOA, which took effect on January 1, 2002. (9) However, the bulk of the 1995 DPOA statutory provisions have remained unchanged.

Limitations of DPOA

According to the previous article, the following provisions of [section] 709.08, which took effect on July 1, 1995, substantially limit the powers that may be conferred upon an attorney-in-fact:

1) Section 709.08(7)(b)5, which provides that an attorney-in-fact may not "[c]reate, amend, modify or revoke any document or other disposition effective at the principal's death or transfer assets to an existing trust created by the principal unless expressly authorized by the power of attorney."

2) Section 709.08(7)(a), which provides that "[e]xcept as otherwise limited by this section, by other applicable law, or by the durable power of attorney, the attorney in fact has full authority to perform, without court approval, every act authorized and specifically enumerated in the durable power of attorney."

Applying the doctrine of last antecedent (10) to [section] 709.08(7)(b)5, Mr. Tiernan contends that as a result of the lack of a comma prior to the phrase "unless expressly authorized by the power of attorney" an agent acting under a DPOA may not:

1) Create, amend, modify, or revoke any document or other disposition effective at the principal's death, notwithstanding anything to the contrary stated in the DPOA (11); or

2) Transfer assets to an existing trust created by the principal unless expressly authorized by the power of attorney. (12)

Analyzing [subsection] 709.08(7)(b)5 and 709.08(7)(a) together, the article argues that an attorney-in-fact may not exercise, without prior court approval, the following powers, all of which are commonly intended to be exercised by an attorney-in-fact:

1) Exercise authority over jointly owned property of the principal, including real estate, bank accounts, payable on death accounts or in-trust for accounts, as exercising authority over property with survivorship features constitutes a modification of a disposition effective at the principal's death. (13)

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