Granting someone a power of attorney is often a useful tool and an integral part of your overall estate plan. Powers of attorney can give someone other than yourself the ability to access and manage your financial affairs. As you work with your attorney to create the plan that is right for your needs, you may have to consider whether or not to use a durable power of attorney as opposed to a springing power of attorney. A durable power of attorney is effective the moment the document is signed, whereas a springing power is not effective until certain criteria are met.
Springing Powers of Attorney Vs. Durable Powers of Attorney
Why should you consider using a durable power of attorney rather than a springing power? The following are five reasons:
- If your concern is the possibility of abuse of the power, studies show that the majority of abuse cases involving powers of attorney occur when the principal is mentally incapacitated. This means that regardless of whether the power granted was springing or durable, the abuse would still have taken place.
- A springing power of attorney only becomes effective if you are mentally incapacitated. If the power is needed for a different reason—such as during a trip abroad—it cannot be used.
- Durable powers of attorney are effective regardless of mental capacity. There is no worry about potential arguments over your mental status if the power is used.
- Doubts about a person’s ability to handle a power of attorney appropriately should not be a factor for using a springing vs. durable power of attorney. Powers of attorney are a big responsibility; therefore, if there is any doubt about someone, he or she should not be appointed to the role.
- The process of determining incapacity can be complicated. If the power is needed in an emergency, this defeats the purpose.
Deciding which power of attorney is right for your family is an important task. For additional helpful tips as you create your estate plan, we encourage you to sign up for our free newsletter. If you have addition questions, we invite you to contact us directly.