Powers of Attorney Can Be Very Powerful When Drafted Correctly

When creating a Power of Attorney, a lot of people simply download a form off the Internet, or use an old family form that may have been created decades ago.  Simple things can make a world of difference.

I spoke with a health care professional awhile back and she emphasized that the inability of someone to take a company to court for billing disputes, mismanagement of care, and financial oversight disputes was disturbing as there was little to no recourse for a family member to raise these issues.

Wait, what?

Mandatory arbitration is all the rage, and most courts here in Florida, will uphold a mandatory arbitration clause.  But there is a very simple way to defeat this.  Include a clause in the POA that prohibits arbitration agreements.  A general power of attorney is very broad and usually includes things like banking transactions, exercising stock rights, buying and selling property, signing contracts for at home nursing care, assisted living facilities or nursing homes, pursing and settling claims etc.  Pretty much everything.

However, you can limit this — and one clause we recommend to our clients is that they put a clause in the power of attorney that prohibits the agent from entering into any agreement which has an arbitration clause in it.  Then if something goes wrong, you will have the right to pursue a claim in court.  And if you win, the other side has to pay your attorney’s fees in most cases due to fee shifting rules.

Here is a simple clause that we recommend:  No Power to Agree to Binding Arbitration.  This way the POA  cannot agree to any mandatory arbitration clause found in the small print of some contract that the POA may sign.  It will not preclude a non-binding alternative dispute resolution process such as mediation.

If you do not have a power of attorney, or if you have an old one, or one just pulled off the internet one day, I urge you to see an attorney and get this done.  Ask that attorney to put a clause prohibiting the signing off on mandatory arbitration in the power of attorney.  It’s a simple thing, but it can have an enormous impact.