The Covid-19 Pandemic has changed the world as we know it and presented daunting challenges we have not encountered in our life time. It requires a total review of your estate plan and business entities to assure you are taking full advantage of Florida laws designed to protect your family and business.

The hard new reality: What plan was best for you prior to 2020 may not be what is best for you today

Take this three minute survey for a quick assessment:

If single: Special 2020 Asset Protection Checklist for Single Professionals

If married: Special 2020 Asset Protection Checklist for Married Professionals Note to All: Two important legal documents for everyone over age 18:

• An up-to-date Florida specific Durable Power of Attorney
• A comprehensive Florida Health Care Surrogate

Special note to all parents with college students and young adults:

We now know that COVID-19 can attack any age. The last people who consider a DPA and Health Care Surrogate mentioned above are young adults. If you are a parent with adult children over age 18, I urge you to convince your sons or daughters to secure these important legal instruments. For a flat fee, we are available to prepare these documents, review the key legal provisions with your adult children, and email them for signing.

We will get through this together, as we did after Pearl Harbor and 9/11, and will be a stronger, more united country. Stay well and stay safe!

The Florida legislature recently enacted the “Florida Power of Attorney Act” (“FPOA”, Fla. Stat. §§709.2101-.2402), fundamentally overhauling existing law, and making sweeping new changes. Even though the new law recognizes durable power of attorneys (“DPA’s) executed under the prior law, we are advising clients to update their DPA, if more than a year old, because the changes are so comprehensive. For Florida licensed attorneys who receive our Alert, we are making available at cost our new “Super DPA’s” drafted to take advantage of the new law.

Effective Date: The effective date of the FPOA is October 1, 2011. “Legacy” POA’s, or those signed before October 1, 2011, are not invalid, but the action of the agents or attorneys-in-fact under Legacy POA’s must be interpreted under the new law.

Key Changes 1. Powers to Attorneys-In-Fact must be explicitly stated. A popular blanket provision that allows the agent to do “anything the principal could do if present” is not valid. The practical effect of this law is that a good POA must set forth in fine detail – let’s call it excruciating detail – all powers. A good POA is likely to be 10-20 pages; the redraft of the POA for a single person that I have recently prepared is 17 pages.

2. Principal Must Sign or Initial Certain Powers. These are special powers that would significantly alter the Principal’s estate plan, such as the power to make gifts, disclaim interests, change rights of survivorship accounts, change beneficiary designations, or create or modify an inter vivos trust. Such powers must be initialed or left blank for the purpose to give some assurance that the client is aware of his or her choices.

3. Springing POA’s Are Eliminated. However a Springing POA is still valid if signed prior to October 1. Note: I have never prepared a Florida Springing POA, and I have never seen one in 15 years of practice because of inherent problems in knowing or proving if the DPA has “Sprung”.

4. Copies. A default provision in the new law gives photocopies or electronic copies of the POA the same effect as the original.

5. Revocation. An existing POA cannot be amended, but must be revoked in its entirety.

6. Co-Agents. Reversing prior law, the new law allows that if more than one agent is named, each co-agent can act independently. See §709.2111.

7. Prohibited Powers. The Agent’s duties and powers can be described as Mandatory, Default and Prohibited. Such Prohibited powers include

• Perform duties under a contract requiring personal services;

• Make an affidavit as to personal knowledge;

• Vote in a public election;

• Execute or revoke a Will or Codicil; or

• Exercise powers or authority that the Principal holds in a fiduciary capacity (e.g., as a Trustee).

These prohibitions are consistent with current Florida Law.

Note: For an excellent summary of FPOA, see Professor David Powell’s Scrivener’s Summary. To read, click FPOA Summary.

Take Away Points 1. Who Should Update Their POA? Experienced estate planning attorneys know that banks and other financial institutions dislike POA’s and will look for any excuse not to honor one. In Florida, this means that a POA needs to be up-to-date, Florida specific, and compliant with Florida law. Given the sweeping changes of the new law, my advice to clients is to update your DPA if older than a year. The new law recognized those POA’s executed prior to October 1, 2011 (so called “Legacy POA”), but soon the practical reality will be that all banks will impose numerous obstacles for POA’s that are executed prior to October 1, 2011.

2. Prepare Affidavit for Attorney-In-Fact. The financial institution can demand an Affidavit from the Agent that the Principal is not deceased and

that the DPA has not been revoked among other facts. It will likely make sense to have this Affidavit prepared at the same time as the DPA in anticipation that most institutions will likely be requesting it.

3. Super DPA vs. Limited DPA with Security Provisions. The new law enables the estate planning attorney to truly create a “Super DPA”. Of course such a DPA in the wrong hands carries significant risk. My advice to clients is that you only give any DPA to those persons in whom you have a high degree of confidence in their judgment and honesty. If you do not have this confidence, the answer is usually not preparing a limited DPA with security provisions; the answer is find a person or persons you do trust.

It may be a good idea to give the Super DPA to two persons who can act as a check and balance if there is any lack of confidence.

Conclusion: Good Time to Update or at Least Review

Since the new statute so fundamentally changes the law on DPA’s, and even though the new law recognizes durable power of attorneys (“DPA’s) executed under the prior law, we are advising clients to update their DPA if more than a year old. The “one year advice” is purely arbitrary, however, I suggest it is good practice.

Final Note: We have available for Florida licensed attorneys Super DPA’s forms to take advantage of the new law; these DPA’s come in two types: Super DPA Form #1: married with children; Super DPA Form #2: single with children. Both forms include an Affidavit for the Attorney-In-Fact. The cost for all forms is $275. To purchase, contact info@raricklaw.com or call Rarick & Associates at (305) 709-2858. Disclaimer

The information in this article is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult a Florida attorney.

______#2. Successor Trustee. This is the person you have appointed to step into your legal shoes if you become incapacitated – in other words, one of the most important decisions you can make. Who have you appointed to take charge if you are incapacitated? What is the order of succession of trustees who will take over management of your financial affairs if you are unable to do so? If you have any question whatsoever about your order of succession, please call the office.

______#3. Transitions. Has there been a marriage, divorce, or separation of anyone named in your will or trust? Has there been a birth or adoption of a child or grandchild? If so, your estate plan may need to be amended.

______#4. Asset Protection. The recession may be over, but will your business survive the recovery? Do you know which assets you own that are protected and which are exposed? NOTE: While a living revocable trust helps avoid probate and keep legal control in your family, it does not protect your assets. We have a number of other legal tools to help make you an unattractive target for a lawsuit. If we have not done a recent asset protection analysis, now may be a good time to do so.

_____ #5. Life Insurance. When is the last time your checked (a) the owner of your life insurance policies; and (b) the beneficiary designations for those policies? Most life insurance either should be owned by an irrevocable life insurance trust or name your trust as the primary beneficiary. Why? If the policy is owned by a life insurance trust that is properly maintained, you protect the full value of the policy by avoiding estate taxation if you have a taxable estate. If the policy does not name your trust as a beneficiary, all the instructions in your trust to safely manage that money will be useless.

______#6. Corporate Minutes. If you have an incorporated business, when is the last time that you filed corporate minutes? It is important, at the least, to keep annual minutes. Remember, the corporate veil can be pierced and your personal assets attacked if you do not follow the corporate formalities. We will review your corporate minutes at no charge; if the record needs to be updated, we will advise you of the total cost to bring the record current.

______#7. $13,000 Gift Allowance. Do you wish to consider making gifts to family members to reduce your estate tax exposure? Current law allows you to make gifts of $13,000 per person per year ($26,000 if married) with little or no tax consequence to you or the recipient. For many persons, this is an effective tool to reduce your estate tax liability. However, see the warning in Point #8 for gifts to minors. NOTE: Gifting must be done prior to January 1; preferably November or early December. ______#8. Gifting To Minors. Beware of UGMA accounts! The full name is Uniform Gift to Minors Act. Unless your child is a future Warren Buffet, it is not advisable to give minors any substantial gifts without placing those funds in a trust. UGMA accounts should be used for only small amounts – such as $1,000 or less. Otherwise, the minor can have complete access to the funds when he or she turns 21.

______#9. Estate Tax Check. Do you know your current estate tax exposure? Absent congressional action the exemption will fall back to $1 million per person with a top rate at 55% on January 1, 2011. Following the Republican mid-term election successes, Congress may act to change the estate tax law. Stay tuned – we will be sending out an Alert via e-mail if Congress does so act. Note: If you have a trust with a Marital and Family Trust (technically called a credit shelter trust) and we have not recently reviewed your estate plan, we should run the numbers to see if the funding formula in the trust allocates the exemption to achieve appropriate tax planning for your family.

______#10. Health Care Surrogate. If you have a child over 18 who is now in college it is highly recommended that he/she give you legal authority to make medical decisions on their behalf. Remember, once your child turns 18, he/she is sui juris, and you have no legal authority to make any legal decision on their behalf. Also note, if we have not met to review your estate plan since 2004, it is likely that your health care surrogate is not current.

______#11. Estate Plan Review. Has it been more than two years since we sat down and reviewed your estate plan? If so, I recommend we schedule a meeting before the end of the year to assess whether it continues to meet all the needs of your family.

APPOINTMENT: To schedule an appointment to review or update your estate plan or the funding of your trust, call Rarick & Associates at (305) 709-2858 or email Phil at prarick@raricklaw.com.