Effective October 1, 2011, Florida Statutes Chapter 709 will be substantially revised. Durable Powers of Attorney executed prior to October 1, 2011 will remain effective, with the new statute applying to all newly executed documents.
Those serving as an agent under a power of attorney will now have expanded duties in a fiduciary capacity, including:
- The agent cannot act in a manner contrary to the principal’s best interest.
- A new mandatory provision that the agent must attempt to preserve the principal’s estate plan to the extent actually known by the agent if preserving the plan is consistent with the principal’s best interest based on five outlined factors which include
- the value and nature of the principal’s property
- the principal’s foreseeable obligations and needs for maintenance
- minimization of taxes including income estate, inheritance, generation-skipping transfer and gift taxes
- eligibility for a benefit, a program or assistance under a statute or rule; and
- the principal’s personal history of making or joining in making gifts.
The Statute clearly directs that an agent must now keep a record of all receipts, disbursements and transactions made on behalf of a principal and must create and maintain an accurate inventory every time the agent accesses a principal’s safe deposit box.
- While this subsection attempts to add safeguards to protect the agent by stating that an agent who acts in good faith is not liable to any beneficiary of the estate plan for failure to preserve the plan and unless the agent breaches a fiduciary duty he or she is not liable if the value of the principal’s property declines, it appears from the Statute that the agent must make sure that he or she accurately documents records in order to substantiate and protect him or herself.
- The Statute also includes a provision that if an agent is selected because of special skills or expertise then in essence that agent must use those special skills or expertise meaning they are held to a higher standard.
In addition, for the first time, the statute provides a specific sanction for an agent who violates his or her duties under the statute. In the event of a violation, the agent is liable to the principal or the principal’s successors in interest (i.e. those indicated under their estate plan) for the amount required to restore the value of the principal’s property to what it would have been had the violation not occurred and reimburse the principal or the principal’s successors in interest for the attorney’s fees and costs paid from the principal’s funds on the agent’s behalf in defense of the agent’s actions.
