A comprehensive estate plan will often address one or more contingencies in which you need someone else to take actions or make decisions on your behalf. It might be your lawyer delivering an important document, a trusted friend managing your finances when you’re incapacitated, or your spouse making healthcare decisions you can no longer make. By considering these types of potential scenarios in advance, you can make sure that, should the need arise, your agent will be someone you trust and who knows your wishes and values. The next question is what kind of “agent” do you need and this relates to the differences in Florida powers of attorney vs guardianships.
You see, Florida law recognizes several alternative means of legally empowering one person to act on behalf of another. A “power of attorney” (or “POA”) is authority delegated to an agent to take certain specified actions on a principal’s behalf. Although the relationship is governed by statute, a POA does not require court appointment—just a legally compliant document executed by the principal. Most powers of attorney prepared for estate planning purposes are durable powers of attorney in Florida. There is also a “medical POA” (often referred to as a “designation of healthcare surrogate” under Florida law) is a specific, statutory power of attorney applicable to medical decisions.
By contrast, a “legal guardian” in Florida is “a surrogate decision-maker appointed by the court to make either personal and/or financial decisions.” When comparing Florida powers of attorney vs guardianships, it is helpful to consider that Florida guardianships are most commonly associated with children, Florida law also provides for appointment of guardians to act for mentally or physically incapacitated adults.
In many jurisdictions, a court-appointed individual acting on behalf of a disabled adult is known as a “conservator.” And the relationship is called a “conservatorship.” In Florida, though, the term “conservatorship” is reserved for very narrow circumstances involving an “absentee” who is not present to manage his or her affairs. Only a select few situations, such as soldiers held as prisoners of war, can qualify an individual as an absentee.
Delegating Authority to Agents
The need for “surrogate decision-makers” and appointed agents regularly arises when creating a comprehensive Florida estate plan, and considering the various appointments for Florida powers of attorney vs guardianships is a critical part of this process. If you have minor children, you probably want to identify in advance who should serve as their guardian should you no longer be able to. Or, should you become incapacitated, it makes things much easier on your loved ones if you have already made arrangements for someone to handle your affairs or make healthcare decisions. In a less drastic scenario, you might simply want to authorize a trusted friend to manage some of your finances while you’re traveling outside the country for an extended period.
Florida law provides tools for addressing each of these situations. And, as any carpenter or mechanic could tell you, you need to be sure to use the right tool for the job. Just as importantly, you need to make sure the estate-planning instrument you select is executed properly so that it can function as intended. An experienced Florida estate-planning attorney can help you create the POAs, guardianship appointments, and other legal documents necessary for your estate plan to run smoothly.
Guardianships in Florida Estate Planning
Under Florida guardianship law, a guardian is appointed to act and make decisions on behalf of a “ward.” In estate planning, the potential ward is usually a minor child of the person whose estate is being planned or the planner him or herself. In either case, a guardian must be formally appointed by a judge before the relationship becomes effective. However, Florida courts give considerable deference to preferences stated in advance by the parents of a minor. Or, in the case of a “pre-need guardianship” naming a guardian in the event of the declarant’s subsequent incapacity, Florida courts almost always honor the declarant’s wishes unless the named individual does not qualify for the appointment under Florida law.
Addressing the potential need for guardianships in advance cuts down on the time, expense, and procedural hoops usually involved with guardianship proceedings. More importantly, proactive appointments ensure that, if a future guardian proves necessary, he or she is someone you trust and know is capable of doing the job responsibly. Whether the potential ward is you or your children, you’ll have the peace of mind that comes with knowing a dependable, faithful guardian will be making the decisions.
To be effective under Florida law, a pre-need guardianship must clearly identify both the declarant and the proposed guardian and must be signed by the declarant in the presence of two witnesses. If an appointment is for the care of a minor child, the document must include the minor’s full name, date of birth, and SSN, and must describe the existing relationships between the declarant, proposed guardian, and minor child. In the event the appointment is triggered, the named guardian need only petition the relevant court for confirmation of the appointment.
Florida recognizes two basic classes of guardianship: guardian of the person and guardian of the estate. A guardian of the person makes decisions and acts for the ward relating to personal matters like living arrangements and healthcare; whereas a guardian of the estate has authority to administer the ward’s finances and property.
When an adult ward is involved, Florida courts prefer limited guardianships (in which the guardian only has authority over specific matters) if the ward can still handle some things him or herself. However, voluntary guardianships—in which the ward is of sound mind but otherwise incapable of managing some or all affairs—are permitted when the ward consents to the appointment. In general, Florida judges try to use the least restrictive viable option. So, if a prospective ward’s affairs could be adequately managed through an existing POA, designation of healthcare surrogate, or trust, a court will be reluctant to appoint a guardian.
Some states like California have a special form of conservatorship for wards suffering from serious mental illnesses like schizophrenia. While Florida does not have a specific type of guardianship covering mental illness, in some cases a mentally ill individual could qualify as “incapacitated” under Florida’s guardianship statute.
When thinking about Florida powers of attorney vs guardianships, a major difference is that Guardianships are court-supervised relationships, and, as such, guardians are required to submit regular reports to the supervising court. The reports must include an accounting of any finances over which the guardian has authority and a description of the ward’s current circumstances. Some states have even stricter monitoring requirements. California law, for instance, requires periodic reports from court-appointed investigators tasked with visiting the ward, along with the guardian’s regular reports.
Conservatorships in Florida Estate Planning
As mentioned above, a “conservatorship” in Florida can only be established if a prospective ward qualifies as an “absentee.” An absentee could be a soldier, sailor, or Red Cross representative missing during a period of hostilities or detained by a foreign power. Or, an absentee can be someone who goes missing under circumstances suggesting the disappearance may be due to death, amnesia, or some other mental incapacity. A court-appointed conservator in Florida has essentially the same authority to manage an absentee’s finances and property as a guardian of the estate appointed under the guardianship statute.
While the limited nature of Florida conservatorships makes them less relevant than guardianships for most estate plans, military and Red Cross personnel should consider declaring in writing their wishes relating to a potential conservatorship prior to visiting a region where hostilities are ongoing.
Powers of Attorney in Florida Estate Planning
When comparing Florida powers of attorney vs guardianships, a POA sets forth in writing certain actions which a named “agent” may take on behalf of the “principal” granting the power-of-attorney. In addition to the durable power mentioned above, Florida recognizes other kinds of limited and general POAs. Durable simply means that the POA will survive the appointees “incapacity” and is intended to do so, whereas other powers do not. Florida law authorizes durable POAs as long as they unequivocally state that the authority is not revoked upon incapacity. Other limited powers of attorney are restricted in time and/or scope or are only applicable to a specific transaction. General powers of attorney are broader, remaining effective until revoked by the principal or until the occurrence of an automatic termination event (e.g., the death of the principal or agent).
Even with general POAs, the document must identify each and every action the agent is empowered to take. Florida law does not recognize universal delegations with regard to “all matters.” Certain categories identified in the POA statute (e.g., “banking transactions” and “investment transactions”) are allowable and extend to all transactions within the category, as enumerated in the statute.
In financial planning, POAs are useful for delegating the power to handle matters you cannot or do not wish to manage any longer. An agent could pay bills or manage assets while you are unavailable—or handle affairs you simply do not want to be bothered with during retirement. This could mean appointing an agent under limited power-or-attorney to manage an investment property or to communicate with financial or governmental institutions.
If you become incapacitated, you may need an agent under general POA to handle some or all of your legal and financial affairs. Importantly, the general rule in Florida is that a POA is automatically revoked upon the principal’s incapacity. So, if you have an existing POA and become incapacitated, the POA is assumed to be void.
The other side of the coin is a “springing POA,” which does not become effective until a future date or the happening of a specified event. In many states including California, springing POAs are a popular way to prepare for future incapacity without delegating any authority for so long as the principal remains capable. Florida, though, no longer recognizes springing POAs, unless executed prior to October 1, 2011. A valid Florida POA takes effect upon execution, and a POA that operates otherwise is invalid.
For Florida residents who want to have a POA ready to go in case of incapacity but don’t want to empower an agent until that occurs, a popular approach is to execute a durable POA early but withhold delivery to the agent until the POA is needed. Commonly, the principal leaves the executed POA with an attorney with instructions to deliver the document upon a specified occurrence–such as certification of the principal’s incapacity.
A designation of healthcare surrogate (a/k/a “medical POA”) is governed by a different statute and empowers a surrogate to make medical decisions for you if you become incapacitated. Medical POAs ensure that, in an emergency medical situation, you have someone you trust to make important healthcare decisions on your behalf without the time-consuming court-appointment process. Medical POAs need to also consider the current HIPAA laws and a HIPAA release for medical decisions in Florida should be included in every Florida estate plan.
The Power-of-Attorney vs. Guardianship in Florida
While both guardianship appointments and POAs are important to a comprehensive estate plan, the two have different, though frequently complementary, functions. A POA is fundamentally a private arrangement and does not require any court appointment or finding of incapacity. Convenience alone is sufficient. The power can be revoked at any time without the need for court involvement and can be limited to very narrow areas or transactions.
Guardianships, on the other hand, require court approval and involve extensive, continuing review by a judge. In most cases, a finding of incapacity is a prerequisite to appointment of a guardian for an adult ward. And, once appointed, a guardian cannot be removed without court approval.
While guardianships can be limited, the limitations are generally within the appointing judge’s discretion. Someone who executes a Preneed Guardianship appointment in Florida can include limitations, but the judge has the ultimate say. A principal executing a POA, though, can craft the delegated powers to be as broad or narrow as he or she sees fit.
Once an individual become incapacitated, he or she is no longer capable of executing a valid POA or designation of healthcare surrogate. Absent an existing durable or medical POA or other arrangements made in advance, a court-approved guardianship is necessary to handle the affairs of an incapacitated individual.
When it comes to the care of minor children, POAs are not useful. A parent cannot use a POA to delegate parental responsibility or authority, and children cannot execute a valid POA on their own behalf. Only a parent or court-appointed guardian has authority to act on a child’s behalf.
An important similarity between POAs and guardianships is that both relationships involve a fiduciary duty, one of the highest duties recognized under Florida law. Both agents and guardians have a duty to act prudently, loyally, and in good faith—and to look out for their ward or principal’s best interests—within the scope of the relationship.
Steve Gibbs, Esq.