When it comes to managing your affairs, you might have heard of a legal term called a springing power of attorney. This document “springs” into effect when you become incapacitated, empowering someone else to handle your financial matters. It combines the features of a durable power of attorney, which continues even if you become incapacitated, with a condition that it only takes effect under specific circumstances.
While the springing power of attorney might seem like a perfect solution for those wary about giving away control too soon, it can bring its share of complications.
Understanding a springing power of attorney
A springing power of attorney takes effect at a future point or event, typically when the principal becomes incapacitated. Unlike a standard power of attorney, which is effective as soon as you sign it, a springing one remains dormant until you meet certain conditions. This concept appeals to those who are uncomfortable giving control over their affairs until absolutely necessary.
Potential problems with a springing power of attorney
Despite its potential appeal, a springing power of attorney can cause several challenges. First, there could be a delay in its activation. The agent needs a “determination” of your incapacity, usually from a doctor, before they can use the document. This process could take time, disrupting the efficient management of your affairs.
Furthermore, issues related to privacy and health laws, like the Health Insurance and Portability Act, may arise. These laws limit the release of medical information, so your agent will need proof that your doctor can legally release information about your incapacity. This issue may lead to further complications and delays.
Defining “incapacity” can be problematic. Your document must define what incapacitation means for you, and your doctor must agree that you meet this definition when the time comes. This gray area could lead to disputes and make it difficult for your agent to help you when you need it.
While a springing power of attorney can seem like a cautious and sensible choice, you must weigh its benefits against potential problems. Understanding the legalities of the document can help you make the most informed decision for your future.