What Is the Difference Between a Springing and Non-Springing Power of Attorney?
A financial power of attorney (also known as a durable power of attorney) is a document that grants broad powers and responsibilities to a trusted third party or “agent” who can act on your behalf. This document only allows an agent to make non-medical decisions on your behalf (that is decisions about your money and property). A power of attorney can be a valuable planning tool that lets you decide in advance who will manage your affairs should you become unable to do so. It can also be a way to avoid expensive guardianship or conservatorship proceedings if you become disabled or incapacitated.
There are two types of durable power of attorney. You may have heard of the terms “springing” and “non-springing” power of attorney and wonder what they mean.
Springing Power of Attorney
A springing power of attorney is a document executed now, but that does not take effect unless the principal becomes incapacitated or a particular event occurs. This type of power of attorney is contingent on something specific happening before it comes into force. If the event or incapacity never occurs, an agent will not be empowered to act on behalf of the principal.
Many people want a springing power of attorney because they feel more comfortable knowing their agent can only exercise powers if a triggering event occurs. This can alleviate any concern that the agent may try to misuse a power of attorney.
A springing power of attorney is not always easy to use. It may be necessary to have a medical professional such as a doctor certify that a triggering condition has occurred.
Let’s say you become medically incapacitated. Your doctor will likely have to complete written statement stating your condition or that certain events occurred. Often, a medical professional will not be comfortable signing a statement related to your capacity to manage finances. In some cases, your doctor may require the attorney for the medical institution to advise them on how to proceed. This can cause delays that can frustrate an agent’s ability to act, especially in time-sensitive situations.
Non-Springing Power of Attorney
With a non-springing power of attorney, the agent has the powers granted in the document the moment it is signed by you. So, even if you are capable of signing for yourself or handling certain transactions, your agent could still sign for you without your involvement.
No matter what type of power of attorney you choose, it is very important that the person you designate as your agent be someone you trust to manage your property in accordance with your best interests. Contact us to discuss what kind of power of attorney is best for you.