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Can My Agent Use My Durable Power of Attorney to Make Gifts or to Change Beneficiaries?

| Dec 2, 2016 | Elder Law, Estate Planning |

Estate planning clients sometimes ask whether the person (or “agent) named in their Durable Power of Attorney (“DPOA”) has the power or authority to do certain acts regarding the principal’s estate or assets. For example, can the agent named use the power of the DPOA to make a gift to another person? Or can the agent use the DPOA to make a change of beneficiary designation-for example on a pay-on-death account or on life insurance?

Chapter 709 of Florida Statutes governs Durable Powers of Attorney. Section 709.2202 provides that in order for an agent to exercise certain powers, the principal must sign or initial next to each specific power granted. The powers to which this separate enumeration apply are:

(a) To create an inter vivos trust;

(b) With respect to a trust created by or on behalf of the principal, to amend, modify, revoke, or terminate the trust, but only if the trust instrument explicitly provides for amendment, modification, revocation, or termination by the settlor’s agent;

(c) To make a gift, not to exceed the annual gift exclusion amount (currently $14,000.00);

(d) To create or change rights of survivorship;

(e) To create or change a beneficiary designation;

(f) To waive the principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan; or

(g) To disclaim property and powers of appointment.

If there is no specific enumeration in the DPOA containing the principal’s signature or initials, then the agent does not have the power or authority to take these actions. In most instances, this acts as a safeguard against abuse by the agent. Obviously, the actions governed by this statutory provision could significantly impact the principal’s assets and therefore giving the enumerated authority should be undertaken carefully. As a result, when considering a DPOA, you should discuss these issues with your estate attorney.

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