PLEASE NOTE: To protect your safety in response to the threats of COVID-19, we are offering our clients the ability to meet with us in person, via telephone or through video conferencing. Please call our office to discuss your options. 

Brand

Get Out Ahead Of Your Issue
— Call Us Today

813-280-0082

Planning. Preparation. And Acting With Purposeful Intent.

Is a Person Serving as Agent Under a Durable Power of Attorney Entitled to Compensation?

by | Aug 4, 2021 | Durable Power of Attorney, Elder Law, Estate Planning |

A Durable Power of Attorney (“DPOA”) is a legal instrument in which a principal can designate a person as agent to act for the principal. Most DPOAs give the agent a “laundry list” of powers covering a wide-range of financial, legal, and personal matters. These could include matters such as paying bills, filing insurance, signing  paperwork, conveying real estate, etc. While a DPOA is helpful for all adults, it is especially beneficial for elderly, disabled, or infirmed adults who may need assistance with their financial affairs.

In any comprehensive estate plan, a DPOA will be among the recommended documents executed. In our law practice, we encourage every estate planning client to allow us to include the DPOA in their plan. When we discuss DPOAs with clients, a common question often arises: Is the agent under a Florida DPOA entitled to any compensation? Fortunately, Section 709.2112, Fla. Stat. provides a clear answer:

(1) Unless the power of attorney otherwise provides, an agent is entitled to reimbursement of expenses reasonably incurred on behalf of the principal.

(2) Unless the power of attorney otherwise provides, a qualified agent is entitled to compensation that is reasonable under the circumstances.

(3) Notwithstanding any provision in the power of attorney, an agent may not be paid compensation unless the agent is a qualified agent.

(4) For purposes of this section, the term “qualified agent” means an agent who is the spouse of the principal, an heir of the principal within the meaning of s. 732.103, a financial institution that has trust powers and a place of business in this state, an attorney or certified public accountant who is licensed in this state, or a natural person who is a resident of this state and who has never been an agent for more than three principals at the same time.

Stated succinctly, in determining if an agent is entitled to be reimbursed or compensated, the first consideration is what does the DPOA provide? Does it allow or disallow reimbursement or compensation? The language of the DPOA determines the issue. If the DPOA does or does not allow reimbursement or compensation, that is what controls. Assuming the DPOA does not address the issue, an agent under a DPOA may be reimbursed for out-of-pocket expenses. This would apply to expenses paid by the agent on behalf of the principal. An agent under a DPOA may also receive reasonable compensation so long as the agent meets one of the criteria making the agent a “qualified agent” as defined in Section 709.2112 (4), Fla. Stat.

An example may help. Thomas executes a DPOA which does not specify anything about reimbursement or compensation. He names his son, Robert, as primary agent and his neighbor, Samuel, as successor agent. Due to health issues, Thomas needs help from Robert to take care of paying some bills. In so doing, Robert pays some postage and he spends about an hour paying the bills. Can Robert be reimbursed for the postage costs and can he be compensated for his time? In this case, the answer is “yes” to both questions. Robert can receive reimbursement for costs and since he is an heir of Thomas, he can be reasonably compensated for his time. But what if Samuel is the one who was serving as agent—could he be reimbursed and compensated? The answer is “yes” to reimbursement but only “maybe” to compensation. Whether Samuel could be compensated would depend on whether Samuel was an attorney, a CPA, or had never served as agent for more than three principals at any one time.

Preparing and executing an effective DPOA is best done under the direction of an experienced estate planning attorney. While you can probably find a form DPOA on the Internet, you are taking your chances as to its drafting and, if poorly drafted, it can result in your agent being unable to effectively represent you. At Lins Law Group, P.A., we draft DPOA’s for clients in connection with every estate plan which we prepare.

Archives

FindLaw Network