Why We Recommend a Durable Power of Attorney Over a Springing Power of Attorney

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By Jocelyn P. Frawley

We recommend that everyone execute a durable power of attorney as long as they have someone they trust to appoint. A power of attorney is a document that allows the individual appointed to make financial and legal decisions on your behalf. Your agent “steps into your shoes” and can handle your finances as you would, including making investments, spending money, and handling checks in the event of your disability or incapacity. As a fiduciary, they are held to the highest standards and are required to act in your best interest.

In general, there are two types of powers of attorney: immediate and springing. (Virtually all powers of attorney are “durable,” which means that they continue even if you become incapacitated. In the (somewhat distant) past, powers of attorney had to become ineffective when the grantor became incapacitated because that incapacity was deemed to apply to the agent as well. Now, all states have passed laws permitting the creation of powers of attorney which survive the grantor’s incapacity. They are “durable.”)

Most durable powers of attorney take effective immediately upon their execution. However, the agent would not be expected to use it unless you became incapacitated or were unavailable, such as while traveling abroad. This is why you should appoint an individual, and any alternates, that you have the utmost faith in and who would only use the power when appropriate. For additional guidance in choosing an appropriate agent check out this blog post.

In most instances, your agent will not be able to act without the original executed document in-hand and there is no requirement that you provide them with the original once executed. You can simply inform them where to access the original should they need it. For example, we often keep one copy of our clients’ original power of attorney in our office safe with their permission to release it to their named agent and our clients provide their agent with our contact information. Should an unfortunate event take place leaving you unable to manage your own affairs, your agent would come to our office, present their photo identification, and we would provide them with your original power of attorney. Only then would they be able to exercise the powers granted in the document.

In contrast, a springing durable power of attorney only takes effect when the incapacitating event described in the document itself take place. Usually, this event would be the determination of incapacity by one or more certified physicians. While that may seem like how you envision a power of attorney working, the requirement prove incapacity creates barriers for your agent to act when necessary. Most financial institutions will require proof in writing that you are incapacitated which means your agent would have to coordinate getting documentation from providers and would be unable to make decisions or manage your finances until the requirements have been met. Additionally, if the power of attorney document is not clear on what satisfies the “incapacitating event” your agent might have to go to court to determine whether the conditions have been met, which wastes financial resources and precious time. This proof requirement delays your agent’s ability to access funds needed to pay for your care, your bills, and maintain your properties among other ongoing needs you may have.

For these reasons, we recommend our clients execute immediate powers of attorney. When the right individual is appointed as your agent, you can be sure they will not act until you are unable to make decisions on your own and when they do, they will always act with your best interest in

mind. You want your agent to be able to take immediate action when you need them to. A durable power of attorney ensures that they can.

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