Definition:
The spring power of attorney is a legal tool that grants someone the authority to handle your personal affairs upon the occurrence of an event, circumstance, or specific date. Typically, that event is mental incapacity or the inability to make decisions for yourself.
How does the spring power of attorney work?
The spring power of attorney is a legal document that specifies when and how another person you appoint (the agent) can act on your behalf. The spring power of attorney “springs” into action upon the occurrence of a future event, date, or circumstance. For example, the agent can act for you only if you are unable to do so due to incapacity. It usually specifies how you want incapacity to be established – such as through a doctor or psychologist’s examination.
The form may include:
- The person you appoint as your agent
- A backup agent if the first is unavailable
- The date, circumstance, or event that triggers the spring power of attorney
- Requirements to prove the event or circumstance – such as doctors or psychologists
- Terms or restrictions on the agent
- Revocation of any previous powers of attorney
- Witness signatures
The event that triggers the spring power of attorney is often related to a condition that impairs your ability to make sound decisions. These conditions can include:
- Dementia
- Brain injury
- Alcohol or drug use
- Mental health issues
- Coma
As a result of your condition, you may have difficulty communicating, understanding, and remembering the information needed to conduct financial, healthcare, and other transactions.
“Most people who want a spring power of attorney use it as a little extra control,” says attorney Julie A. Paquette, an estate planning specialist based in Michigan. “It gives you extra protection and prevents anyone from accessing your accounts while you still have the capacity.”
Paquette added that the spring power of attorney is not commonly used. This is because the requirements for a spring power of attorney impose strict limitations on the power of attorney, which can hinder your agent’s ability to handle challenging situations.
“Sometimes, when there are urgent needs, your agent has to act quickly,” said Paquette, and situations beyond your control can complicate things further.
For example, during the COVID-19 pandemic, it might have been nearly impossible to find two separate doctors to meet and certify mental incapacity, noted Paquette. In the meantime, some financial issues, such as a home foreclosure, might not wait for certification.
“If you have a foreclosure tomorrow on the sale of your house, you need an agent to stand in for you at the closing to ensure that it happens,” said Paquette. “You can’t wait and search for doctors. It makes it harder, as the power of attorney helps things run smoothly.”
Example of a spring power of attorney
Imagine your aunt has dementia and can no longer pay her bills. She designates you as her agent, and her spring power of attorney documents contain requirements that mandate a doctor to verify that she is mentally incapacitated. You will need to meet the specified requirements in the spring power of attorney to take over her affairs.
Note: Generally, a power of attorney can end in various ways, including after the principal’s death, on a specified date in the power of attorney documents, or when revoked by the principal.
How to choose who gets the power of attorney?
The power of attorney is a vital tool, so you should consider empowering someone who will have your best interest in mind as your agent. After all, the person acting as your agent could dispose of and sell anything that belongs to you, along with other actions.
“If you nominate someone who might steal from you, that’s a terrible situation all around,” said Paquette. “Anyone you choose to act on your behalf could drain your accounts, so you need to select someone very trustworthy.”
Be
“Be careful in your choices,” Paquet suggested. “Some clients appoint their older children as their priority agents, but the older one lives in another country. The second person lives next door. Who will take care of things? Don’t choose a child based on birth order. Think about the practical aspects of incapacity and who can be relied upon.”
If a family member has included a springing power of attorney and appointed you as an agent, consult a lawyer, Paquet suggested. “If someone is acting as an agent, they need legal advice,” she said. “Make sure you are represented regarding your duties and what you can and cannot do, because you don’t want to find yourself in hot water or face personal liability if you mismanage the property.”
Frequently Asked Questions
What is a springing power of attorney?
A springing power of attorney is a requirement in a power of attorney that specifies when the power of attorney becomes effective.
What is the opposite of a springing power of attorney?
Generally, a durable power of attorney is the opposite of a springing power of attorney. While a springing power of attorney activates when you become incapacitated, a durable power of attorney goes into effect upon signing and continues even when you become incapacitated.
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Sources:
- Alaska Court System. “Power of Attorney”, page 3.
- Virginia Poverty Law Center. “Power of Attorney”, page 1.
- Alaska Court System. “Power of Attorney”, pages 5-8.
- JMR Lawyers. “Mental Incapacity and Power of Attorney.”
- Virginia Poverty Law Center. “Power of Attorney”, page 2.
- Laribee & Hetrick, LLP. “Power of Attorney: When Does It End?”
- Alaska Court System. “Power of Attorney”, page 2.
- Virginia Poverty Law Center. “Power of Attorney”, page 1.
- Union Bank Investment Services. “What You Need to Know About Updating Your Power of Attorney Now.”
Source: https://www.thebalancemoney.com/what-is-springing-power-of-attorney-6363310
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