A power of attorney gives an agent the ability to handle certain affairs for you. You can choose to have the power of attorney go into effect immediately or delay it until a certain event occurs. If you opt for the latter, you will create a springing power of attorney. Before creating the document, here is what you need to know.
What Does a Springing Power of Attorney Mean?
A springing power of attorney is like the standard power of attorney. Your chosen agent will have the ability to make decisions about your finances, health, or legal matters. You can opt to have one agent to handle all three areas, or you can choose an agent for each area.
The springing power of attorney varies in that it only goes into effect if an event that you designate occurs. For instance, you could choose to have it activated if you become incapacitated. If you are mentally or physically ill and cannot make decisions, the agent would step in.
Although this seems like the best option for ensuring that your affairs are handled, there are some problems with the springing power of attorney that you should consider before creating one.
What Could Go Wrong?
A springing power of attorney can create a delay in the management of your affairs. If you choose to have it activated when you are incapacitated, the agent will have to wait until your health care provider certifies that you are unable to make decisions. Depending on the provider and the court system, it could take several days or even weeks before this is done.
A delay could also result from confusion about what is incapacitated. For instance, if you have Alzheimer's disease, you could have good and bad days. Your health care provider could be hesitant to certify that you are incapacitated due to your behavior on good days. However, you likely will still need assistance with managing your affairs. Your agent could be severely limited in what he or she could do until the certification is made.
State and federal laws could even create problems with a springing power of attorney. Privacy laws, such as the Health Insurance and Portability Act, prevent health care providers from giving information about your health to your agent. This could mean the agent might not get the health information needed to make decisions about your care. Your agent could still end up going to court to get the approval to act on your behalf.
Most of these problems are avoidable with the right estate planning. Work with an estate planning attorney to address these issues.