A power of attorney authorizes another individual to act on a person’s behalf financially and legally. Some people in Florida may have heard that this is an important document to have in case they become incapacitated. The solution to this might seem to be a springing power of attorney, which becomes effective when a person is incapacitated. This differs from a durable power of attorney, which is effective immediately.
However, there are a number of drawbacks to a springing power of attorney. The problem is that it must be determined whether or not the individual is incapacitated, and this can be complex and time-consuming. Some POAs specify that two doctors must sign to certify that the person is incapacitated, but this may not be straightforward either. For example, if a person is in a slow decline, with good days and bad days, physicians may disagree on what constitutes “incapacitated.” Another potential problem is that this requirement could clash with regulations around the Health Insurance and Portability Act.
Whether the POA is durable or springing, there are other considerations as well. Some banks and other financial institutions only accept POAs completed on their forms. It is also important to choose the right individual for this role. A bank instead of an individual could be appointed.
People may be concerned about who to appoint for other roles within the estate plan as well. For example, a will can be used to appoint an executor, who is responsible for estate administration and probate. This person needs to be responsible, organized and trustworthy, but it is not necessary for the executor to be an expert on financial or legal matters. An attorney could be hired to help with this aspect. Other potential roles in the estate plan include a guardian for minor children and a trustee for a trust.