Should Your Durable Power of Attorney be “Springing”?
We advise all of our clients to execute durable powers of attorney appointing a trusted family member or friend to handle financial and legal matters for them in the event of a disability. This ensures continuity in paying bills and handling personal business, can help prevent loss of funds and avoids the need to go to court for the appointment of a guardian or conservator.
You might expect these documents to take effect only upon your incapacity, often referred to as “springing”, rather than effective immediately upon signing. But almost all of the durable powers of attorney we prepare for clients are immediately effective, even if they will not be used until needed.
We do this because these documents are only useful if they are accepted by third parties. If a bank, for instance, is presented with a springing power of attorney, it will need proof that you are incapacitated.
They will most likely accept a letter from your doctor to this effect, but do we really want to make the person appointed under the power of attorney (the “attorney-in-fact”) have to go to the trouble of getting such a letter. In all likelihood, they will already be overburdened dealing with the your illness while also trying to maintain other work and family responsibilities. To add the requirement that they seek out a physician’s certification of incapacity will only add to their tasks and delay their ability to act on your behalf.
In addition, what happens if you’re only temporarily incapacitated due to an illness or injury? Does this make the power of attorney spring into effect? What happens when you get better? Or would you like the your attorney-in-fact to be able to act for you when you’re away on vacation? If you executed a springing power of attorney, this would not be possible.
The only reason to make a durable power of attorney springing is to make sure that the attorney-in-fact does not act prematurely, before your incapacity. If you are afraid that this might happen, then you might reconsider who you are appointing. (Of course, some clients don’t have a lot of options as to who they can appoint.) And if the attorney-in-fact does exercise the power of attorney while you are competent and without your permission, you can always revoke the instrument. In fact, this might be important information to have ahead of time.
For these reason, we urge all clients to execute immediately effective durable powers of attorney as part of their estate planning. Only when they do not have complete confidence in the person they are appointing and have no reasonable alternatives should they consider making the appointment springing.