A Power of Attorney is a powerful legal document or instrument which delegates in writing authority from one individual to another. The creator of the power of attorney, also known as the “Principal,” grants the right to act on their behalf to an “Agent.” A Power of Attorney can be specifically prepared to expand or restrict delegated enumerated powers based on the wishes of the subject Principal. The benefit of having a Power of Attorney is that it can be used to avoid the need for a court supervised Guardianship should the Principal become incapacitated and no longer have the ability to manage their own financial affairs and property management as well as medical decisions.
One of the most common questions encountered is, “when does the Power of Attorney actually takes effect”? In the past, Florida allowed for the execution of what was referred to as a “springing” Power of Attorney. The term springing refers to the fact that an Agent is only permitted to act upon the satisfaction of a condition. For example, a springing Power of Attorney could be conditioned to only become effective upon written confirmation that the Principal was incapacitated. This type had a notable feature in that it allowed individuals to give a Power of Attorney to a relative without having to worry about them accessing a bank account or transferring property while the Principal still maintained full capacity. Unfortunately, changes in Florida law resulted in the abolition of springing Powers of Attorney. Currently, when a person executes a Power of Attorney the Agent is immediately granted the power to act regardless of whether or not incapacity exists.
Consequently, since Agents have immediate authority to act, the Principal grant the power to only a person they trust completely! Further, discussions should be had with the prospective Agent so they understand the Principal’s wishes as to how their affairs should be handled or managed. Any additional questions should be directed to an experienced estate planning attorney.
Preparing a Durable Power of Attorney for financial matters and a Healthcare for medical decisions are part of a responsible estate plan.
Now, what is the level of capacity that is needed to create a Last Will & Testament? The person making the Last Will & Testament (Last Will) must has sufficient capacity to comprehend:
- the nature and extent of his or her property (i.e., what are the assets and their relative size);
- his or her relationship to the persons who were, or should, be the natural objects of his or her estate; and
- a general understanding of the effects/process of the Last Will.
Florida courts have said that the person making the Last Will must have sufficient active memory to collect in their mind, without prompting, the particulars or elements of the business to be transacted, and to hold details in their mind for a sufficient length of time to perceive at least their obvious relationships to each other, and be able to form some rational judgment regarding them. A testator/testatrix (maker of the Last Will) who has sufficient mental power to do the foregoing is, within the meaning and intent of the Statute of Wills, a person of sound mind and memory, and is competent to dispose of their estate by a Last Will.
The foregoing can also extend to a Revocable Living Trust. With the above test, a person must know what their assets are and the people to whom they would most likely want to leave those assets. And, just as important, the individual should understand the effects of their Last Will or Trust. Practically speaking, creating a Revocable Living Trust may be more complicated than creating a Last Will, so it may be argued that the capacity to create a Trust is a higher standard than that of creating a Last Will.
Again, there are other legal standards of capacity. After testamentary capacity, there are generally three (3) other areas of capacity in the Estate Planning and Elder Law area:
- capacity for Guardianship purposes;
- capacity to create a Durable Power of Attorney (financial matters);
- capacity to make one’s own Healthcare/medical decisions.
Some Florida families become extremely concerned when their loved one is having health issues and may be at the end of their life. However, if a loved one dies without a Last Will, their assets will go to their family under Florida state laws of Intestacy or next of kin.
If it is uncertain whether a person has capacity to create a Last Will, an experienced attorney may be needed to assist in documenting the individual’s capacity to make a Last Will. At times, a physician is used to write a letter or report as to capacity, if the attorney is still unsure.
Finally, under section 732.501, Florida Statutes, “Any person who is of sound mind and who is either 18 or more years of age or an emancipated minor may make a will.” Further, a Power of Attorney can be signed in Florida any time someone has the required capacity, i.e., so long as the individual signing the Power of Attorney is over 18 years of age, understands the powers they are delegating, knows to whom they are entrusting the said powers and how delegating that power can affect the property or person subject to the Power of Attorney, they then have the capacity needed to sign the subject Power of Attorney.
Even when there are times when the same individual may not have the capacity as described herein,
there are times when a person can make their own decisions. These are referred to as “lucid moments.” During a lucid moment, as long as the person comprehends the powers they are delegating, to whom they are delegating them, and how delegating those powers can affect their property or person, they may be able to sign a Power of Attorney or a Last Will if they are capable of understanding the significance and effect of executing a Last Will and the extent of their property and to whom they are distributing their assets after death.
Pursuant to Florida case law, whether or not a maker or creator of a Last Will, Trust, Durable Power of Attorney or Healthcare was of sound mind or had the capacity is determined at the time the subject document or instrument was executed.
If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI, in Miami Lakes, Florida.