Springing vs. Durable Power of Attorney
Understanding Springing vs. Durable Power of Attorney in Estate Planning
A power of attorney is a crucial legal document that grants someone the authority to act on your behalf. This designated person, often referred to as your attorney in fact, can be granted as much or as little authority as you deem necessary. In estate planning, two primary types of powers of attorney are commonly used: durable and springing.
Durable Power of Attorney
A durable power of attorney is one that remains in effect at all times, enabling the designated individual to act on your behalf whenever needed. There is no requirement for a specific triggering event to activate this power. It grants your chosen representative the authority to manage your legal and financial affairs seamlessly.
Springing Power of Attorney
In contrast, a springing power of attorney only becomes legally effective under specific circumstances. This type of power of attorney requires certification by one or more doctors, affirming your incapacity to make legal and financial decisions. It essentially "springs" into action when a predetermined condition is met, such as a medical evaluation declaring you incapable.
Why Estate Planning Experts Prefer Durable Power of Attorney
While opting for a durable power of attorney may initially seem riskier than choosing a springing power, most estate planning professionals recommend the former for several compelling reasons:
1. Lack of Clarity in a Springing Power of Attorney: Defining the incapacity that triggers a springing power of attorney can be challenging. Incapacity is not always as straightforward as it may seem. For example, you might be mentally unfit to manage financial affairs while still capable of making decisions related to your will. This lack of clarity can lead to family disputes and confusion among medical care providers.
2. Need for Court Approval with Springing Power of Attorney: Obtaining the certification required to trigger a springing power of attorney can be cumbersome. Doctors may be hesitant to share information due to privacy laws, necessitating a court order to implement the power of attorney. This can result in unnecessary expenses and delays during a critical time.
3. Recognition of a Springing Power of Attorney: Financial institutions and banks readily recognize a durable power of attorney document, making transactions smoother. In contrast, when presented with a springing power of attorney, they may require additional documentation or proof that the power has been triggered. This added complexity can hinder the designated individual's ability to manage your financial affairs effectively.
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Protecting Yourself With a Durable Power of Attorney
To safeguard your interests when granting a durable power of attorney, consider the following steps:
- Choose Someone You Trust Implicitly: Select an individual you have absolute trust in to act as your attorney in fact. While this is often a spouse or adult child, other trusted individuals may better suit this role
- Control Access to the Document: You don't have to physically hand over the power of attorney document. Instead, store it securely in a place where you can monitor access. Share the location with your designated attorney in fact or another trusted individual. Instruct your attorney in fact to contact the designated person if the document is needed.
How Our Estate Planning Lawyers Can Help
Understanding the nuances of durable and springing powers of attorney is vital for effective estate planning. By opting for a durable power of attorney and implementing protective measures, you can ensure a seamless transition of authority when the need arises. We are ready to help. You can use the button below to schedule a free information call, or simply give us a call at 781-784-2322.