Springing Power of Attorney

Definition

A Springing Power of Attorney is a special type of Power of Attorney (POA) that becomes effective at a future date or upon the occurrence of a specific event, typically the disability or incapacity of the principal (the person granting the authority). Unlike a regular power of attorney, which becomes effective immediately upon execution, a springing power of attorney “springs” into effect only when the triggering event specified in the document occurs. The agent (the person receiving the authority) will then have the legal power to act on behalf of the principal, according to the instructions outlined in the document.

Examples

Medical Incapacity: John Doe executes a springing power of attorney naming his daughter as his agent. The document specifies that it only becomes effective if John is incapacitated due to a medical condition. Once a doctor provides a written statement of incapacity, the document takes effect, allowing the daughter to make medical and financial decisions on John’s behalf.
Advanced Age Planning: Jane Smith creates a springing power of attorney that becomes effective upon her reaching a certain age (e.g., 80 years old) or being declared incapacitated by at least two physicians. This future-proof approach prepares her legal affairs well in advance.

Frequently Asked Questions (FAQ)

Q1: What is the difference between a springing power of attorney and a durable power of attorney?

A1: A durable power of attorney becomes effective immediately upon signing and remains in effect even if the principal becomes incapacitated. A springing power of attorney, on the other hand, only becomes effective upon the occurrence of a specific event, such as the principal’s incapacity.

Q2: How is incapacity determined for a springing power of attorney?

A2: Incapacity is typically determined by a medical professional or multiple medical professionals who provide a written statement verifying the principal’s inability to make decisions.

Q3: Can a springing power of attorney be revoked?

A3: Yes, the principal can revoke a springing power of attorney at any time, as long as they are still legally competent.

Q4: What are the requirements to create a springing power of attorney?

A4: The requirements can vary by jurisdiction, but generally, it must be in writing, signed by the principal, and often notarized and witnessed. It must also clearly outline the specific event that will trigger its effect.

Q5: Are there any risks associated with a springing power of attorney?

A5: Yes, delays in recognizing incapacity, potential disputes among family members, and the agent’s unfamiliarity with the principal’s preferences during an emergency are common risks.

Power of Attorney (POA): A legal document that authorizes one person to act on another’s behalf in legal or financial matters.
Durable Power of Attorney: A type of POA that remains effective even if the principal becomes incapacitated.
Principal: The person who grants another the authority to act on their behalf through a POA.
Agent (Attorney-in-Fact): The individual authorized to act on behalf of the principal through a POA.

Online References

Fundamentals of Springing Power of Attorney: Business Law Basics Quiz

### When does a springing power of attorney become effective? - [ ] Immediately upon signing. - [x] Upon the occurrence of a specified event. - [ ] When the agent agrees to act. - [ ] When the principal notifies the agent. > **Explanation:** A springing power of attorney becomes effective only upon the occurrence of a specified event, such as the incapacity of the principal. ### Who determines the incapacity of the principal for a springing power of attorney? - [ ] The agent. - [ ] The principal. - [x] A medical professional. - [ ] A court of law. > **Explanation:** Incapacity is typically determined by a medical professional who provides a written statement verifying the principal’s inability to make decisions. ### Can a principal revoke a springing power of attorney once it has been created? - [x] Yes, as long as they are legally competent. - [ ] No, once it’s created it cannot be revoked. - [ ] Only with the agent’s consent. - [ ] It can only be revoked by a court order. > **Explanation:** The principal can revoke a springing power of attorney at any time, as long as they are still legally competent. ### What type of power of attorney becomes effective immediately and remains effective if the principal becomes incapacitated? - [ ] Springing Power of Attorney - [x] Durable Power of Attorney - [ ] Limited Power of Attorney - [ ] Medical Power of Attorney > **Explanation:** A durable power of attorney becomes effective immediately upon signing and remains effective if the principal becomes incapacitated. ### What is a primary risk associated with a springing power of attorney? - [ ] It immediately grants too much power. - [ ] There are no associated risks. - [x] Delays in recognizing incapacity. - [ ] It cannot be activated under any circumstance > **Explanation:** One primary risk associated with a springing power of attorney is the delay in recognizing incapacity, which can hinder timely decision-making. ### Which term describes the person who grants the authority in a power of attorney? - [x] Principal - [ ] Agent - [ ] Beneficiary - [ ] Trustee > **Explanation:** The principal is the person who grants another the authority to act on their behalf through a power of attorney. ### Which individual acts on behalf of the principal in a power of attorney? - [x] Agent (Attorney-in-Fact) - [ ] Executor - [ ] Trustee - [ ] Guardian > **Explanation:** The agent (or attorney-in-fact) is the individual authorized to act on behalf of the principal through a power of attorney. ### Is a springing power of attorney effective immediately upon signing? - [ ] Yes, it is always effective immediately. - [x] No, it is not effective until a specified event occurs. - [ ] Only in certain states. - [ ] Yes, but only for medical decisions. > **Explanation:** A springing power of attorney is not effective until a specified event occurs, such as the incapacity of the principal. ### What essential element must a springing power of attorney include to be valid? - [ ] A detailed list of the agent’s duties. - [ ] The agent’s medical history. - [x] A description of the specific event that will trigger its effect. - [ ] The principal’s last will and testament. > **Explanation:** A springing power of attorney must include a description of the specific event that will trigger its effect to be valid. ### What is one advantage of a springing power of attorney? - [x] It provides control until the principal is incapacitated. - [ ] It is easier to activate than other POAs. - [ ] It reduces the need for a will. - [ ] It automatically grants all powers to the agent. > **Explanation:** One advantage of a springing power of attorney is that it allows the principal to retain control until they become incapacitated, at which point the agent can step in to manage their affairs.

Thank you for exploring the concept of the Springing Power of Attorney with our comprehensive guide and quiz. Happy studying and best of luck in mastering the concepts of Business Law!