Florida's adoption of the Uniform Power of Attorney Act: is it sufficient to protect Florida's vulnerable adults?

• Author: Bell, Rebecca C.

INTRODUCTION PART II PART III PART IV CONCLUSION Appendix A INTRODUCTION

Fred was a widower who lived in Florida apart from any other family members. He had very little contact with his three children in recent years. His one son lived on the other coast of Florida and his two daughters lived out of state. He recently attended a seminar conducted by a financial advisor who recommended that he execute a durable power of attorney so that someone could pay his bills when he was unable. Fred lived on a limited fixed income and was unwilling to pay an attorney for a power of attorney. He visited the local library and used the free internet access to download a free power of attorney form. He completed the form, naming his son, Sam, as the agent because he lived the least distance from him. The form contained a line to check if Fred wanted Sam to have gift-giving authority. Fred checked the line, thinking he wished Sam to continue making the periodic gifts to his favorite local charity. Fred took the form to his local bank branch where two of the bank tellers witnessed and notarized his signature. Fred's assets consisted of his home and savings accounts containing approximately $200,000.

Shortly after he executed his power of attorney at the bank, Fred suffered a heart attack while at home. A neighbor found him and called an ambulance. The neighbor also saw the durable power of attorney on the counter and contacted Sam. Unbeknownst to Fred, Sam had lost his job and now supported himself through unemployment payments. Sam arrived and decided to move into Fred's home since Fred had a lengthy recovery ahead. Sam used the power of attorney to access Fred's bank accounts and pay Fred's bills. Sam also began using Fred's money for his own expenses. Fred's condition required twenty-four-hour care, so Sam placed him in a nursing home. Sam quickly used all of Fred's money on himself and even obtained a line of credit on Fred's home. When Fred died in the nursing home less than six months later, his two daughters were notified. The daughters produced a will Fred executed ten years ago, which included a residuary clause devising his property equally among his three children. Fred's two daughters are left trying to determine how their father's savings were spent.

Fred's son financially exploited his father. Financial exploitation is a form of elder abuse. (1) If a third party had detected the abuse during Fred's lifetime, options for protection and intervention could have included reporting the abuse to Adult Protective Services or petitioning for an emergency temporary guardianship. (2) Civil and criminal penalties were also available to punish the financial exploitation. (3) What options existed, however, for prevention or early detection of such abuse? Revisions to durable power of attorney laws seek to address the need for such options.

The National Conference of Commissioners on Uniform State Laws ("NCCUSL") approved the Uniform Power of Attorney Act ("UPOAA") (4) in 2006. (5) The Florida Bar Real Property, Probate and Trust Law Section created legislation to adopt the UPOAA, with modifications, "to update Florida's power of attorney law to reflect changes in the general law of agency, support portability of powers of attorney and provide additional protections for Florida citizens." (6) Florida adopted the UPOAA, with significant modifications, with the passage of Senate Bill 670 in the 2011 Florida legislative session. (7) This article evaluates the effectiveness of the Florida Power of Attorney Act ("Florida's Act") in providing additional protections for Florida residents executing a power of attorney, while maintaining the principal's autonomy. Part II provides the development and purposes of the UPOAA, which appealed to the drafters of the Florida Act. Part III details the benefits and limitations of the UPOAA and the Florida Act's modifications as related to the agent's duties, authorities, and liabilities. Florida's modifications of the UPOAA, however, require improvement to further protect the principal. Finally, Part IV examines the weaknesses that remain in the durable power of attorney laws and the viability of additional reforms suggested by other authors. The author concludes that the best additional reforms should address educating the principal and agent better, which includes revising the law to add agent requirements to further abuse prevention. Appendix A provides a chart of the UPOAA sections relating to the agent's duties, authorities, and liabilities with the Florida Act's modifications for comparison.

PART II

The original Uniform Power of Attorney Act ("Original Act"), before the new UPOAA was approved in 2006, (8) had last been amended in 1987 (9) and was viewed as largely ineffective in its purpose of uniformity in that many states had adopted non-uniform provisions to address issues not addressed in the Original Act. (10) NCCUSL conducted a national study in 2002 that revealed this lack of uniformity. (11) Standards for agent conduct and liability and the authority to make gifts were among the topics that had become increasingly divergent among the states. (12) The study also revealed that states had, although not necessarily in a divergent manner, restricted the powers of the agent to dissipate the principal's estate or alter the principal's estate plan. (13) The study further revealed other topics necessitating revisions of the Original Act, (14) which are not germane to the issues discussed in this article. The survey distributed as part of the study (15) revealed a high degree of consensus that powers of attorney should, among other requirements,

require gift making authority to be expressly stated in the grant of authority ... provide a default standard for fiduciary duties ... permit the principal to alter the default fiduciary standard ... require notice by an agent when the agent is no longer willing or able to act ... include safeguards against abuse by the agent ... [and] include remedies and sanctions for abuse by the agent.... (16) Although uniformity certainly was an objective of the revised UPOAA, the intent to increase the acceptance of an agent's authority while maximizing flexibility for the agent, yet still preventing and remedying abuses by the agent, were of equal importance. (17) One of the most important impacts of the UPOAA was that it defined the rules related to agents. (18) Professor Karen Boxx, before the passage of the UPOAA, compared the inadequate guidelines for agents to the clear guidance given to trustees by the terms of the trust instrument and by the court to guardians. (19) To meet these concerns, the UPOAA provides guidance in the areas of an agent's acceptance of appointment, (20) default rules for co-agents and successor agents, (21) default rules for agent reimbursement and compensation, (22) mandatory and default rules for an agent's duties, (23) exoneration of an agent, (24) judicial review of an agent's conduct, (25) agent liability, (26) default rules for agent resignation, (27) and restrictions on gifting authority. (28)

The Florida Legislature has acknowledged the importance of creating a minimally restrictive alternative to guardianship in order to allow persons who are only partially unable to take care of their own needs, a form of assistance that least interferes with the ability of a person to act on his or her own behalf. (29) As recognized by those conducting the study to revise the UPOAA, (30) power of attorney acts need to maintain a balance, however, between maximizing a person's autonomy and providing protection against abuse and exploitation. (31) The Florida Act seeks to ensure this balance by adopting the UPOAA with its concentration on defining the rights and responsibilities of the agent while also establishing more effective methods of preventing, detecting, and remedying abuses. (32)

PART III.

With respect to the powers granted in the power of attorney, the drafters of the revised UPOAA acknowledged a tension between having a broad grant of powers, which increases the flexibility and likelihood of acceptance, and requiring powers that were required to be specifically delegated, which protect the principal from casually granting such powers or being unaware of the powers being granted to the agent. (33) This tension was resolved in favor of protecting the principal. (34) In fact, the chief mechanism of preventing abuse is the UPOAA's requirement for the power of attorney to include express language to authorize actions that "have [significant] potential [for] dissipating the principal's property or altering the principal's estate plan...." (35)

The Florida Act provides even greater protection of the principal through more stringent requirements. (36) The Florida Act's drafters recognized a tension between estate planning and elder law practitioners' interests in maximizing the agent's flexibility to make donative transfers and create trusts for planning purposes, and the interest in preventing dishonest or fraudulent transfers. (37) The UPOAA addresses this tension by allowing donative transfers, but including provisions that ensure the principal's decision to include this authority is an informed decision. (38) The Florida Act created more stringent requirements than the UPOAA by requiring that the principal sign or initial next to the powers expressly stated. Although cumbersome for the principal at the execution of the document, the principal will be prevented from overlooking any unintentional grants of authority. The restrictions on gift-giving authority are common in many state statutes. (39)

The Florida Act also places greater restrictions on the agent's authorities, than the UPOAA, by stating that some authorities are non-delegable. (40) It has followed the approach in the guardianship statutes by preventing certain authorities from being delegated. (41) The Act continues in its approach of incorporating...