Incapacity & Ownership of Florida Property
Although reference is made to Florida, in reality it could be California, Texas, Arizona, Michigan or any other state for that matter. The issues and solutions are the same.
What if you become Incapacitated?
A person is considered incapacitated when they have lost their ability to make important decisions, including those related to their assets or property. What happens to your Florida property if you become mentally incapacitated? Your loved ones may encounter significant problems when trying to sell or transfer your property.
Under Florida law, if a person has been deemed incapacitated, the procedure called “guardianship” may be required in order to determine who can legally undertake the duty and responsibility to make decisions for the incapacitated person and his property. Throughout this procedure, the incapacitated individual is called the “ward” and the person appointed the “guardian.” Any person whom the Court considers fit and qualified to act as guardian may be appointed, however it will give preference to someone who is related by blood or marriage, has relevant educational or professional experience, or who has the capacity to manage the finances of the ward.
Florida Courts will only turn to the guardianship procedure when no simpler alternative is available. You can avoid guardianship altogether by creating and executing documents such as a durable power of attorney, a designation of healthcare surrogate or creating a trust. The language in these documents will arrange for this unfortunate situation in advance by giving your loved ones the right to transfer, sell or otherwise manage your property, should you become incapacitated. A power of attorney is a legal document delegating authority from one person to another. A power of attorney might be used to allow another person to access bank accounts, sign a contract, make health care decisions, handle financial transactions, sell real estate or sign legal documents for you.
What about Estate Documents drafted under Canadian law?
Canadians often wonder if this can all be avoided by the use of their existing Canadian power of attorney or other estate planning documents. Unfortunately, these documents will often not be accepted by title companies to transfer title of Florida property or other third parties such as banks, hospitals. Even if they consider accepting a Canadian power of attorney, the title company or other third party, will likely request an opinion of counsel that the power of attorney was properly executed in accordance with local law. This can be costly and time consuming.
Florida Power of Attorney
The laws of Florida are very specific as to what is required to create a valid power of attorney. For example, there are certain words that must be used in the document to indicate that the power of attorney will not be affected by subsequent incapacity, thus creating a durable power of attorney. There are also certain formalities regarding witnesses and notarizing the documents that are different under Florida law. If these formalities are not complied with, the document will be invalid.
If you own property in Florida or spend a significant amount of time in Florida, it is prudent to have a Florida power of attorney prepared by a lawyer who is knowledgeable about such things. A power of attorney enables someone to act on your behalf when you are unable to do so. The reason for needing a particular power of attorney for Florida is that the law relating to the creation of a power or attorney is very specific as to what wording, or what subject has to be covered in the wording of the power of attorney. Without that particular wording, the document is invalid. There may be special circumstances in which a power of attorney prepared outside of Florida would be recognized, but when a crisis occurs, you do not want to be in the position of having to review all of the circumstances of the other power of attorney to see if it will be recognized. Usually, one prepared under Florida law is restricted for use only in Florida, such that any other power of attorney you have is still operable otherwise.
About the Author
Michael Kennedy is an attorney with more than 10 years of U.S. legal and tax experience, licensed by the states of Michigan and California and permitted by the Law Society of Upper Canada to provide U.S. legal services in Ontario as a Foreign Legal Consultant. Michael provides quality, cost effective & convenient U.S. tax and legal services to Canadians and others from his office in Windsor, Ontario.
The information contained herein is for informational purposes only, and is not legal advice, cannot be relied upon as legal advice or a substitute for legal counsel. It is not intended to be attorney advertising or solicitation. If you have a legal question, please consult with a licensed U.S. lawyer. Reliance upon any information contained in this article will not create an attorney-client relationship with the author.