Berge & Berge, LLP Blog

Monday, August 31, 2015

Understanding the Concept of a ‘Springing’ Power of Attorney

When I sign a power of attorney, is it effective immediately, or only upon my incapacity?

A power of attorney is an important – and in many cases, crucial – component to a comprehensive estate plan. In general, the power of attorney appoints an agent to lawfully conduct the financial and legal affairs of the principal as necessary and when needed. When preparing a power of attorney, the principal has the option of making the document effective immediately or at some point in the future. The latter option, known as a “springing” power of attorney, carries significant pros and cons, which an experienced estate planning attorney can help explain.

In most situations, a springing power of attorney becomes effective once the principal has been deemed physically or mentally incapable of carrying on his or her own affairs. This “triggering event” usually requires documentation from a doctor certifying that the principal is officially unable to continuing making prudent decisions.

The benefits of a springing power of attorney generally involve prevention of power of attorney abuse, or unlawful misuse of the document by deceitful agents. In a recent article published by the University of Baltimore Law Review, a prominent estate planning attorney asserted that the springing power of attorney model should be the default under the Universal Power of Attorney rules (UPA), as it works to ensure elders are protected from the agent’s “ability to accumulate power.”

On the other hand, many principals find it more convenient to execute the power of attorney document immediately. Aside from incapacity, there are a myriad of reasons why a power of attorney may be useful. For instance, if a principal is out of the country and needs a document or transaction executed, the agent can conduct these tasks without a finding of mental incapacity by the principal.

In sum, it depends on the principal’s level of comfort with his or her named agents. For more information about this important distinction, contact an experienced elder law attorney today.

If you are considering executing a power of attorney and are not sure about the specifics, please contact the Law Offices of Berge & Berge. Serving successfully as Estate Planning and Elder Law attorneys for clients San Jose, Santa Clara, and surrounding areas, we can be reached  at 408-985-9918.

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