Four years ago, the Florida legislature passed the new durable power of attorney law intending to protect the elderly from financial exploitation. The result, however, causes caregivers frustration because the new law allows banks and the government to force additional attorneys fees and expenses on caregivers.
Healthy seniors could be at risk from their own families if special care is not taken. This article explains the new durable power of attorney law in Florida and how it can affect caregivers and how they assist seniors with financial management.
An effective durable power of attorney allows one person to do anything relating to financials for another person. The durable power of attorney is not just used for banking, but it should also be effective to file taxes, protect assets from a nursing home, purchase health care services, and interact with insurance companies.
The durable power of attorney is extremely powerful. If you put the power in the wrong hands, that person can clean your bank account out. That is bad.
Durable Power of Attorney Law Changed October 1, 2011 and Online Forms May Not Work
Because a durable power of attorney is so powerful, the legislature saw fit to make it more difficult for evil-doers to trick seniors into signing these documents. The change is effective as of October 1, 2011.
In the past, the evil-doers could go to the nears office supply store, get a form, have their elderly neighbor sign the form, and the evil-doer can go clean out the elderly person’s bank account. No more.
Under the new law, durable powers of attorney are required to have specific provisions in them or else banks will not accept the durable power of attorney.
The forms at office supply stores are never up to date with Florida law, so the evil-doer’s actions will not work under this new law.
The New Florida Durable Power of Attorney Law as New Signing and Initially Requirements
Also, the new law has specific signature and initialing requirements. For example, without an initial here, the durable power of attorney will not allow your family member to set up special trusts used to protect assets from a nursing home:
The new law has also indirectly affected caregivers:
- The new law has given banks the license to reject perfectly valid durable powers of attorney. Even ones that were supposed to be grandfathered in under the new law.
- For any attorney whose practice is not specifically focused on estate planning or elder law, they are drafting improper documents that banks and the government entities will not accept.
- DPOAs that pre-date the new law are also difficult for caregivers to push through when dealing with Medicaid coverage for nursing home care and asset protection strategies to preserve money from the nursing home.
Bad Durable Powers of Attorney will Cost You Thousands of Dollars In Attorneys Fees and Court Costs
Without an effective durable power of attorney, a caregiver for an elderly person without capacity is put in a really expensive position. If a durable power of attorney is not accepted and a new one cannot be signed, then the caregiver may have to apply for court supervised guardianship. Guardianship typically costs at least $6,000 to set up. There are multiple attorneys and doctors involved in a guardianship (not to mention an $800 court filing fee).
A guardianship should be avoided at all costs. It places a higher burden on families. Even more than probate court. And everyone wants to avoid probate court.
Probably the biggest frustration for a healthy reader of this article that wants to maintain absolute control over your money is that the new law makes durable powers of attorney immediately effective.
In the past, you could place language in your durable power of attorney that essentially says, “Bank: you cannot accept this unless the person presenting it has a doctor’s note, signed and notarized, saying that I cannot manage my financial affairs.” You can no longer do that. When you sign a durable power of attorney, it works now.
Each Attorney Uses Different Durable Power of Attorney Forms… and They Don’t Always Work
Believe it or not, there is no uniform durable power of attorney form that attorneys use. I’ve reviewed hundreds of other attorneys’ durable power of attorney forms. I have even had to fight it out with an insurance company about legal language in a durable power of attorney.
A durable power of attorney is only good when a bank or government accepts the action of a caregiver using the durable power of attorney.
Contact us today if you would like to update your durable power of attorney.