The name may strike you as strange, but a springing power of attorney could be a very important part of your estate plan.
The term “power of attorney” usually refers to a document in which you grant another person legal authority to do certain things on your behalf. Generally, the document itself spells out the limitations of the power. For example, many people sign such a document to give their accountant the right to file their taxes for them. The document specifies that the accountant has this power, but unless it says so, the accountant can’t do anything else on their behalf.
Power of attorney in estate planning
In your estate plan, a power of attorney can be a way to give another person the authority to make certain decisions on your behalf. One common scenario involves giving an adult child, your spouse, another relative or a trusted friend the authority to make medical decisions on your behalf if you become incapacitated.
Similarly, you might have a power of attorney to give a trusted person the authority to make certain financial decisions on your behalf should you become unable to make these decisions on your own. For example, your document might give your adult child the authority to write checks on your account in order to pay your mortgage if you have become incapacitated.
Springing and durable power
A power of attorney can be considered “durable” or “springing.”
In the examples we gave above, we discussed situations in which you might become incapacitated due to injury or illness. Your power of attorney document would spell out the conditions under which it would go into effect. If those conditions are satisfied, the person you named would have power of attorney to make the type of decisions authorized by the document. Generally, they would keep this power until the conditions no longer apply.
To give a simple example, if you give your spouse the authority to make medical decisions on your behalf while you are sedated for a medical procedure, that power of attorney can “spring” into action the moment you are sedated and end the moment you wake up. The language in the document would spell out the conditions.
A power of attorney that has no such conditions is called a durable power of attorney. Generally, this type of power of attorney stays in place until you specifically revoke it.