We examine why Revenue Ruling 2023-2 matters in Jacksonville estate planning, what it says now, and how it affects your estate planning strategy in Jacksonville for passing wealth to loved ones.
A business owner works hard to establish a company, build wealth, and protect assets. That owner creates a plan for company growth and backup in case of an unexpected disruption. They should also plan for unforeseen events, such as mental or physical incapacitation. Like powers of attorney (POA) in estate planning, business owners can and should implement POAs in business planning.
Financial and medical POAs help protect Jacksonville business owners and maintain business operations if the owner becomes unable to care for personal or business functions. These legal documents empower a trusted person or agent to handle business and financial matters and oversee the owner’s medical care. This article discusses powers of attorney and incapacity in business planning to protect the owner and the company in a crisis. Learn more from business planning Lawyer Bill O’Leary in the video below.
Why Durable Powers of Attorney Are a Must-Have in Jacksonville Business Planning
Business owners and employees rely on the company for their livelihood; a business needs someone to run it. So, it makes sense for an owner to plan for a day when they can’t run their business. Durable or financial powers of attorney protect company assets, help maintain operations, and authorize someone you trust to keep your business running if you can’t. POAs answer the questions in a crisis most important to your business:
- Who’s in charge (especially if you have employees)?
- How are the bills getting paid?
- Who can sign contracts and make decisions for the company?
- Who is overseeing my care if I’m incapacitated?
- What about employee paydays?
What You Need To Know About Powers of Attorney in Florida
Essentially, the person establishing the power of attorney, the “principal,” authorizes a person of their choice or their “agent” to act and decide on their behalf. POAs differ in their purpose or use. Business owners commonly use financial and medical POAs to protect the business from misuse of funds and oversee their medical care.
According to the Florida Bar’s Consumer Pamphlet, Florida business owners must sign their POA with two witnesses present for the signature and have the legal document notarized before it is valid to be executed. You must be competent or understand what the legal document is and does, and the person you delegate power to must be competent and at least 18 years old.
A business owner delegating financial authority to an agent needs a durable POA. Durable POAs are valid if the owner is incapacitated, while non-durable POAs terminate upon incapacitation, so this distinction is necessary. Florida law requires language stating that the power survives the principal’s incapacity.
How a Financial POA Protects You and Your Florida Business
Financial POAs help protect you and your business in several ways. One significant benefit is protection from fraudulent or misuse of your company’s money. Without a trusted individual accessing the company’s bank accounts, someone can take advantage and drain them.
If you have one, a business partner is an excellent agent who knows the business, its processes, and any actions to take. A financial POA allows your partner to access accounts, pay bills, or sign contracts to keep the company running.
The Strength of a Medical POA for Your Health Care
A medical power of attorney enables the same or a different agent to oversee your medical care if you are physically or mentally unable to. This agent knows your wishes regarding treatments and healthcare providers and can pay medical bills.
Incapacity in Florida Business Planning Key Takeaways:
- Durable POAs: These legal tools can protect you, your employees, and your business.
- Incapacity Planning: Business owners should consider financial and medical POAs.
- POAs in Florida: Language in Florida POAs must specify the power survives the principal’s incapacity.
Conclusion
Every business and business owner is unique. Durable POAs have multiple advantages. If you’re interested in durable POAs in your business planning, consult with Legacy Planning Law Group for clarity and guidance on protecting your business. Schedule a discovery call to discuss incapacity planning for your Jacksonville business.
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