When Does a Power of Attorney Become Effective
By: Barry E. Haimo, Esq.
March 3, 2016
Depending on your purpose for creating a Power of Attorney, you can allow someone else to act on your behalf in a variety of situations, both specific and general.
Most Powers of Attorney are created to plan for incapacity. Incapacity is a temporary or permanent inability to make rational decisions on your behalf due to physical or mental impairments. In the event you are incapacitated and unable to manage your own affairs, you can authorize an agent or the attorney-in-fact to conduct business on your behalf. With a power of attorney (POA), you – the principal – can authorize someone else – the agent or attorney-in-fact – to make legal, financial, and administrative decisions for you, including but not limited to:
- Selling property (i.e. a vehicle or house)
- Signing contracts or legal documents
- Accessing bank accounts
- Handling financial transactions and investments
- Filing taxes
- Paying bills
You can also specify how much or how little power you actually want your agent to have. You may want a General Power of Attorney, which gives your agent broad powers to perform a broad array of legal acts on your behalf. In this case, you will need to create a list within the Power of Attorney document identifying which activities you are allowing your agent to perform. If your agent can sell your house, you will include that on your list. If, however, you don’t want your agent to file your taxes, for instance, you will not include that on your list or may even expressly prohibit it to be sure.
Alternatively, a Limited Power of Attorney can be used for very specific instances and acts. For example, if you will be out of town on a certain date when you will need to sign a contract, you can have a Limited Power of Attorney prepared so that an agent will be able to legally sign the contract in your place.
A POA usually ends once you become incapacitated, unless it is a Durable Power of Attorney. For this reason, most Powers of Attorney are durable so they will continue to be effective after your incapacity.
But when does a Power of Attorney start?
A General Power of Attorney becomes effective immediately after you sign it. A Limited Power of Attorney also starts immediately upon signing the POA but it may tailored to your needs and the powers granted may only be effective for a limited period of time, for a specific event only, specific types of transactions, or a combination of all these scenarios.
The state of Florida no longer allows Springing Powers of Attorney which only become effective when a principal is declared incapacitated.If you already have a Springing Power of Attorney executed before October 1, 2011, your Power of Attorney will be grandfathered in. However, it will only take effect after your primary care doctor confirms that you are incapacitated and unable to manage your own affairs.
A Power of Attorney will no longer be effective when:
- The principal dies
- The principal revokes the POA by executing a separate document
- The purpose of the POA is completed
- The time period of the POA expires
- You have a nondurable POA and are declared incapacitated
A Power of Attorney can be especially useful and beneficial for a variety of situations. Contact an experienced Florida estate planning attorney to answer your questions about a POA and to discuss your unique needs and what options are available to you.
Author:
Barry E. Haimo, Esq.
Haimo Law
Strategic Planning With Purpose
Email: barry@haimolaw.com
LinkedIn: http://www.linkedin.com/in/bhaimo
Google+: https://plus.google.com/u/0/+BarryEHaimoLaw/posts
YouTube: http://www.youtube.com/user/haimolawtv
YOU ARE NOT OUR CLIENT UNLESS WE EXECUTE A WRITTEN AGREEMENT TO THAT EFFECT. MOREOVER, THE INFORMATION CONTAINED HEREIN IS INTENDED FOR INFORMATIONAL PURPOSES ONLY. EACH SITUATION IS HIGHLY FACT SPECIFIC AND EXCEPTIONS OFTEN EXIST TO GENERAL RULES. DO NOT RELY ON THIS INFORMATION, AS A CONSULTATION TO UNDERSTAND THE FACTS AND THE CLIENT’S NEEDS AND GOALS IS NECESSARY. ULTIMATELY WE MUST BE RETAINED TO PROVIDE LEGAL ADVICE AND REPRESENTATION. THIS INFORMATION IS PROVIDED AS A COURTESY AND, ACCORDINGLY, DOES NOT CONSTITUTE LEGAL ADVICE.
