Mindful of its benefits but also aware of the potential for its abuse, Ms. Hemphill and her attorney wisely included in her POA certain protections. Her power of attorney disallowed attorneys in fact from personally gaining from any transaction completed on behalf of Ms. Hemphill, prohibited mixing any funds owned by the attorney in fact with Ms. Hemphill’s funds, and prohibited the attorney in fact from receiving any compensation except for reimbursement of out of pocket expenses. Because of these crucial provisions, the liquidation of the CD’s in the Hemphill case was voided by the Court of Appeals and the money was returned to her Estate.
The importance of limiting a POA’s authority was also underscored in a recent Florida Court of Appeals decision. In Manor Oaks v. Campbell, No. 4D18-3297 (Fla. 4th DCA July 31, 2019), the Court of Appeals determined that a healthcare POA did not authorize a healthcare surrogate to consent to arbitration of a negligence claim on behalf of a decedent against Manor Oaks Nursing and Rehabilitation Center. The Court pointed out that “the body of the document clearly narrows its scope to health care matters, which do not include decisions regarding arbitration of disputes.”
The lessons from Hemphill, Campbell, and other Florida and Mississippi cases are clear. First, be careful who you trust with a power of attorney. Second, when you do vest someone with such power, include careful limitations, such as those in Hemphill and Campbell.