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Termination or Suspension of Durable Powers of Attorney

Written by on Sep 19, 2013| Posted in: General

Often times we are contacted by clients that inquire as to whether or not a Power of Attorney can be terminated and/or suspended for their elderly loved one who becomes incapacitated.  Typically this issue presents itself when an elderly loved one is requested or coerced to execute a Power of Attorney in favor of another family member during a period of time when their capacity may be compromised.  In some circumstances, the Power of Attorney may validly executed and later abused after elderly loved one’s capacity comes into question. 

A valid Power of Attorney is a very valuable tool when properly utilized and likewise can be disastrous if abused.  It is not uncommon for us to receive inquiries from clients who discover that their elderly loved one is being financially exploited by someone abusing a Power of Attorney.  A Power of Attorney is a writing that grants authority to an agent to act in the place of the principal.  The “principal” is an individual who grants the authority to an “agent” under a Power of Attorney.  The “agent” is a person who is granted the authority to act on behalf of the principal under the Power of Attorney, sometimes referred to as the “Attorney-In-Fact”.  Likewise, this term also includes the original agent, co-agent and/or successor agent. 

Pursuant to Florida Statute 709.2019(3), if a person initiates a proceeding to determine the principal’s incapacity or for the appointment of a guardian, the authority granted under a Power of Attorney is suspended until the petition is dismissed, withdrawn or the Court enters an Order authorizing the agent to exercise one or more of the powers granted under the Power of Attorney.  The initiation of a guardianship proceeding, through a Petition to Determine Incapacity, is generally a valuable tool to immediately terminate and/or suspend a Power of Attorney when it is being abused by the agent.  The distinction between the Power of Attorney being terminated rather than suspended is determined based upon whether or not the Power of Attorney is durable.  Durable Powers of Attorney remain in effect after the principal is deemed incapacitated and are not terminated merely based upon incapacity.  The principal’s intent that the authority conferred to the agent shall be exercisable, notwithstanding the principal’s subsequent incapacity, is a pre-requisite for a Durable Power of Attorney.  Regardless of whether the Power of Attorney is “durable”, it will still be automatically suspended upon the filing of a Petition to Determine Incapacity. 

Unless otherwise ordered by the Court, a proceeding to determine the incapacity of the principal does not affect the authority of the agent to make health care decisions for the principal.  The rationale behind this carve-out is that, unlike financial powers, medical powers often deal with life or death issues and, in the absence of an agent to act, the consequences could be disastrous.   If the principal has executed a valid Health Care Advanced Directive designating a healthcare surrogate, the terms of the healthcare surrogate control if same is in conflict with the Power of Attorney unless the Power of Attorney is later executed and expressly states otherwise.

It is important to note that the termination or suspension of an agent’s authority over a Power of Attorney is not effective as to the agent, who acts in good faith, unless the agent is provided with knowledge of the termination or suspension.  Such an act if so performed, unless otherwise invalid or unenforceable, binds the principal and the principal successors in interest.  Therefore, it is important that upon the filing of the Petition to Determine Incapacity, notice is immediately given to the agent and/or attorney in fact advising of the filing of such a proceeding and providing clear directives that such filing suspends the Power of Attorney until further court order.

The guardianship court has wide latitude with regard to a Power of Attorney in connection with an incapacity and guardianship proceeding.  Specifically, the Court may terminate the Power of Attorney, suspend the Power of Attorney or enter an order authorizing the exercise of one or more of the powers granted under the Power of Attorney.

Sometimes the mere filing of a Petition to Determine Incapacity is not sufficient to prevent subsequent loss, misappropriation or waste of assets.  Likewise, the suspension of the Power of Attorney may present difficult challenges to the agent in the event that he or she is no longer authorized to handle the principal’s financial affairs, in light of the fact that the agent was handling such affairs prior to the suspension of the Power of Attorney.  In that case, it is important to consider the possible need for filing for an emergency temporary guardianship to exercise those powers until such time as there can be a full evidentiary hearing and adjudication as to the incapacity of the principal.

The foregoing is just a brief summary of the available remedies to protect elderly loved ones in connection with financial exploitation and abuse of powers of attorney.  It is imperative to know the nuances with regard to incapacity, guardianship and Powers of Attorney when addressing these very important issues.

If you or an elderly loved one is the victim of abuse relating to a Power of Attorney and/or financial exploitation, it is important that you consult a guardianship litigation attorney to address all the remedies available to you.

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