What Is Springing Power of Attorney?

A power of attorney is a crucial part of an estate plan, but in some cases, a springing power of attorney-which only "springs" into effect if you become incapacitated-may be worth considering.

by Ronna L. DeLoe, Esq.
updated September 30, 2021· 3min read

Estate planning includes different types of documents, each of which serves a specific purpose. Including a power of attorney (POA) in your estate plan is important during your lifetime.

A springing POA is a document that doesn't take effect immediately but rather "springs" into action should you be declared incompetent, unable to make your own decisions, or unable to take care of your financial needs.

Considering a Springing Power of Attorney

A POA allows someone, known as your agent or attorney-in-fact, to act on your behalf when you're not available, when you want them to act for you, or, in some cases, when you're not of sound mind. While many people opt for durable POAs, in some cases, a springing POA might be best for your circumstances.

The event that triggers or activates the springing POA is your being declared incompetent or unable to make sound decisions.

It's important that you have an agent you trust to take your place should you be unable to make decisions. You'll also want to select an agent who is competent to handle financial matters and who can make other decisions on your behalf.

A POA is an essential part of estate planning, even if you have a small estate. Without a POA in place, upon your possible incapacitation, someone would have to start a court action to get guardianship or conservatorship over you to manage your affairs.

Definition of Incapacity

The problem with a springing POA is that, in most states, someone must declare you incompetent or incapable of making decisions. Effective POAs include language that defines incapacitation and how to get someone-usually your family doctor, or two treating doctors-to agree that you're incapacitated.

A springing POA should state who will declare you incapacitated, and whether the POA requires one or two doctors to declare incapacity. If this isn't spelled out clearly in your POA, then the decision could end up in court, so it's crucial to define what constitutes your incapacitation.

Springing POA vs. Durable POA

Many attorneys prefer to use a durable POA rather than a springing POA because a durable POA takes effect immediately upon signing, and it lasts even if you become incapacitated. Even if you don't want your agent to have immediate powers, attorneys recommend that you have a durable POA in place as soon as you create your will. Many people name their trusted spouse as their agent.

Both POAs and wills are part of a good estate plan. Awill doesn't cover situations in which you're alive but unable to care for yourself, but a POA does.

A durable POA allows the agent to do almost anything you would normally do for yourself, especially if the POA defines the agent's duties. Your agent's responsibilities could include:

  • Handling your finances
  • Selling real property, if not excluded by the POA document
  • Filing your taxes
  • Investing for you
  • Selling vehicles
  • Paying bills and debts
  • Continuing to operate your business or do what's best for you under the circumstances, such as close your business, if warranted
  • Collecting Social Security or other income for you
  • Handling insurance by either buying or changing policies
Downsides of Springing POAs

Springing POAs take time before they take effect. Your agent must wait until the doctor or doctors decide that you're unable to handle your own affairs. In the meantime, your bills could remain unpaid and your finances could be in disarray until the doctors agree that it's time for your agent to act. Family members or friends could challenge your incapacity in court, so it's usually beneficial to have a durable POA, which takes effect immediately and isn't often subject to court action.

What About HIPAA issues?

The Health Insurance Portability and Accountability Act (HIPAA) deals with privacy and with what information doctors and hospitals can release to people other than the patient.

To ensure your agent can get information about your incapacitation, sign a release or authorization form at the time you sign your springing POA. This form will allow your agent to obtain proof of your incapacity from your doctors. Your agent will have to show the doctors the POA document to confirm the agent is authorized to work on your behalf.

A good estate plan includes having a POA, whether durable or springing. If you have a springing POA, make sure your document clearly states how doctors will determine your possible incapacity.

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LegalZoom.com Inc. published this content on 30 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 September 2021 22:51:09 UTC.