No one can predict when they are going to experience a disabling injury, begin to lose their cognitive abilities, or suffer the onset of a mental illness. These are not pleasant thoughts. In fact, most people may never take the time to ask themselves the following:
- “What would I do if I were injured and could not function?”
- “What will happen when I begin to experience dementia?”
- “Who will pay my bills, run my business, or make my medical decisions if I become mentally incapacitated and cannot make my own decisions?”
Although these are unpleasant concepts to think about, it is best to ask yourself these questions now, while you are mentally able to answer them. If an unexpected accident or illness occurs, it is too late to start preparing.
Jump ahead to these sections:
- What’s the Purpose of a Springing Power of Attorney?
- What’s the Difference Between a Springing Power of Attorney and Other Types of Power of Attorney?
- Are There Different Types of Springing Power of Attorney?
- Pros and Cons of Springing Power of Attorney
- How Do You Assign or Change a Springing Power of Attorney?
- Are There Any Good Alternatives to Springing Power of Attorney?
For people working on end-of-life planning or undertaking significant treatment to address a serious illness, it may be helpful to execute a springing power of attorney while you are legally and cognitively able to do so. This article will help you decide whether a springing power of attorney is right for you.
What’s the Purpose of a Springing Power of Attorney?
Although not everyone will need a springing power of attorney in their life, it is something everyone should consider, as you can create a springing power of attorney before you need it. Indeed, the very purpose of a springing power of attorney is to be ready to “spring” into action at a time when you can no longer make decisions for yourself.
Having a springing power of attorney is your way of telling your family, friends, doctors, and the world, that if there ever comes a time when you are incapacitated and not able to make decisions for yourself, you authorize another person (called an “agent”) to express your intentions for you.
The purpose is not for you (the “principal”) simply to authorize an agent to make your decisions (although you could do this) but, rather, to authorize your agent to indicate what your own preferences would be if you were competent and able to make a decision for yourself. It is as if you are deciding now what you would want to happen later, under certain circumstances, and authorizing your agent to express your intentions at that time.
As much as you might like, you may not be able to account for every situation that may require a springing power of attorney. In that case, your agent may need to make the decision that they think you would make if you were able to express your opinion.
This is why it is important to choose an agent you trust, who would be willing to make a decision that they know you would want, even if they do not agree with it. It should be someone you trust with your financial and medical well-being.
If you have someone you trust who would be willing to serve as your agent, you should speak with them about what your preferences would be if you were incapacitated. It is not helpful to assume that because someone is related to you or knows you well that they will know what you would want them to do with your money, property, or health care decisions.
The unexpected pressure of making these decisions could be more damaging than helpful, especially if your loved one is emotionally distressed. It helps to discuss your preferences with a trusted loved one and allow them to think about the significance of the responsibility they will be assuming if they accept.
What’s the Difference Between a Springing Power of Attorney and Other Types of Power of Attorney?
What is unique about a springing power of attorney is that it only becomes effective once you become incapacitated. This is why you must discuss your options with your agent before it is needed.
There are other types of powers of attorney that act differently than the springing power of attorney. You should understand how these other types of powers of attorney work to decide if a springing power of attorney is what you need.
Are There Different Types of Springing Power of Attorney?
Yes, there are several different kinds of springing power of attorney. A springing power of attorney is considered a “durable” power (as opposed to a “non-durable” power). Durable powers of attorney take effect when the principal becomes incapacitated and continues until the principal’s death. In other words, it is “durable” through the principal’s incapacity.
A “non-durable” power of attorney is one that becomes effective as soon as it is signed, while the principal is competent to make decisions, but it terminates when the purpose of the power is fulfilled or if the principal becomes incapacitated.
A non-durable power of attorney is most often used on a temporary basis when the principal will be unable or unavailable to make decisions. For example, a principal may undergo surgery or otherwise be unavailable to make a specific financial or business transaction.
A non-durable power of attorney would then authorize an agent to make decisions for them for that specific event or transaction. Once the event or transaction is completed, the non-durable power ceases. If the principal becomes incapacitated during that time, the power terminates.
However, springing powers of attorney remain effective until the principal’s death (or until the principal regains their mental capacities and can make their own decisions again). And these durable powers of attorney can include different types of powers, including the power to make medical and financial decisions on behalf of the principal.
Pros and Cons of Springing Power of Attorney
A springing power of attorney becomes effective when the principal becomes incapacitated. However, many people prefer using this type of power because it prevents an agent from acting on the principal’s behalf when they are still capable of making their own decisions. This helps to avoid an agent abusing the power.
However, there are drawbacks to using the springing power of attorney as well. Here are some of the problems you could face if you use a springing power of attorney:
Most states have statutory provisions for the use of springing powers of attorney. However, not every state recognizes and enforces these types of powers. Before you rely on a springing power of attorney, you should confirm with your attorney that your state will recognize and enforce this type of power.
Even if your state recognizes springing powers of attorney and you have one in place, it may not be effective as soon as you need it. This is because before your agent can act on your behalf, they must demonstrate that the condition that triggers their authority to act has occurred. In other words, they must offer proof that you are, in fact, incapacitated or incompetent to make your own decisions.
In most states, this requires confirmation by one or more physicians who can testify that you are sufficiently incapacitated. This can cause delay in your agent’s ability to act when you need them to act.
One of the hurdles of getting a physician’s determination that you are incapacitated is defining what “incapacitated” means. What qualifies as sufficient incapacity to trigger your springing power of attorney is not defined by your physician. Instead, it must be clearly defined in your power of attorney document. And different people may have different views of what satisfies the definition that is included in your document.
Problems can arise if your agent believes that you have satisfied the threshold for incapacity but your physician does not. What happens if your physician feels that you are incapacitated but your agent does not? What happens if you want your agent to act for you under certain circumstances, but those circumstances are not included under your definition of incapacity in your document? Sometimes, using a springing power of attorney can lead to more problems than solutions.
Privacy (HIPAA) concerns
By now, everyone is familiar with the privacy laws that surround just about every exchange of medical information that occurs. You may not understand the laws themselves, but you probably know that the Health Insurance Portability and Accountability Act, more commonly recognized as “HIPAA,” limits a physician’s ability to share medical information with third parties.
These rules are strictly enforced, and their applicability to powers of attorney are no different. HIPAA requirements often can limit or delay an agent’s ability to obtain medical information so that they can act on your behalf under the authority afforded in your springing power of attorney.
How Do You Assign or Change a Springing Power of Attorney?
Most states that recognize spring powers of attorney have statutory provisions that either provide a standard template or form that can be used to execute a springing power of attorney or provide specific requirements for executing a valid document. You should check the rules in your state to be sure you validly execute your document in your state.
In general, the rules for executing a power of attorney require that the document be:
- Signed by the principal
- Witnessed by two competent adults
Usually, the persons who witness the execution of the document may not be the person who serves as the agent. The execution requirements for a power of attorney are very much like the rules for executing a will. If you wish to amend or change your existing power of attorney, you must revoke the existing document and follow the same rules for executing a new document.
Are There Any Good Alternatives to Springing Power of Attorney?
A springing power of attorney has its advantages, but there are difficulties that you may want to avoid. For example, it is sometimes easier to execute a durable power of attorney that takes effect as soon as you execute the document. This allows your agent to act on your behalf if you need them to, and it allows them to continue to act even when there is some question of your incapacity.
Opting for this alternative requires that you thoroughly trust your agent with all financial and medical decision-making aspects of your life. Under this alternative, your agent will be able to act even though you are able to make your own decisions. You want to be sure your agent is someone who will not take advantage of this dynamic. If you have any doubt about the trustworthiness of your agent, you will want to choose another agent.
A Springing Power of Attorney Is Useful but Is Not for Everyone
A springing power of attorney is a useful legal tool for someone who is able to make decisions about their own financial or medical affairs but have concerns about their ability to make such decisions in the future.
Depending on the level of your concern and the likelihood that you may face some incapacity in the near future, it may be the right time to consider a springing power of attorney. However, it is worth remembering that a springing power of attorney is not appropriate for everyone.
Before you opt for a springing power of attorney, consult with your attorney to discuss your circumstances and be sure that a springing power of attorney is appropriate for you.