Durable and springing powers of attorney are related, but distinct, concepts. A durable power of attorney continues after you are incapacitated and ends after your death. A springing power of attorney takes effect upon a triggering condition, typically your incapacitation. A durable springing power of attorney is a mixed grant, designed to take effect after your incapacitation and remain in effect while you are unable to act for yourself. Here’s what you need to know.
A financial advisor can help you determine which estate planning documents you will need to protect your assets.
What Is Power of Attorney
Power of attorney is a grant of legal authority that allows an agent to act on your behalf in legal, medical and financial matters. Within their scope of authority, your agent’s decisions will be as binding as if you had made them. This means that a power of attorney agent can take actions such as filing your taxes, signing binding contracts, making medical decisions, withdrawing money from your bank accounts, or taking and paying loans in your name.
Your agent can only act within the scope of their authority, and you define this authority in the document that grants them power of attorney. It’s essential to do this with care. Many, if not most, states default to what is known as a “general power of attorney” if the grant document does not specify a scope of authority. This would mean that your agent has broad authority to act over most areas of your life.
Power of attorney is a highly state- and jurisdiction-specific area of the law. This means that every jurisdiction has its own rules for how power of attorney works and the exact scope of this grant. For example, not every state uses a springing power of attorney. In other states, the scope of a durable power of attorney can differ broadly.
For this reason it’s essential to consult a legal and financial professional before enacting any power of attorney documents.
What Is a Durable Power of Attorney?
Durable power of attorney is a form of power of attorney assignment the continues after your incapacitation.
Under ordinary circumstances, a power of attorney grant ends if the principal is incapacitated. This is, in part, to protect the incapacitated principal, who cannot revoke or modify the power of attorney if they disagree with their agent’s decisions.
A durable power of attorney supersedes this. This grant lasts until the principal either dies or revokes the power of attorney. If you are incapacitated, the power of attorney will continue uninterrupted. This allows your agent to continue acting on your behalf while you cannot, and is particularly essential if you anticipate any time-sensitive financial, legal or medical matters.
Unless you specify otherwise, a durable power of attorney takes effect immediately when you fill out the power of attorney form. Your agent will have this authority immediately and it will remain in effect until you revoke the power of attorney form.
What Is a Springing Power of Attorney?
Springing power of attorney does not take effect immediately. Instead, it takes effect (“springs” into effect) based on specific conditions. You specify those conditions when you write the power of attorney grant and, until they are met, your agent has no authority to act on your behalf.
Most people use a springing power of attorney in case they are incapacitated. In that case, your agent will assume power of attorney if you are ever medically or legally incapacitated, after which point they can act on your behalf. This is particularly useful for medical directives, as your agent can then make decisions on your behalf if you are unable to do so.
If you use a springing power of attorney, it’s important to describe your conditions with specificity. Failing to do so can lead to conflict when you are least able to manage it.
For example, say that you only name “incapacitation” as your condition. This can be a variable, disputed concept that can range from complete unconsciousness to a medicated state. Doctors are often reluctant to declare a patient medically incapacitated except for in extreme circumstances, such as when someone is unconscious and/or in immediate medical distress, which can lead to disputes over who has the authority to act on your behalf during a medical event.
Finally, it is common to make this grant a durable springing power of attorney. This is a power of attorney that takes effect once certain conditions have been met, such as your incapacitation, and remains in effect until you revoke it. It allows your agent to continue acting on your behalf without being challenged about the ongoing validity of their authority.
Durable vs. Springing Power of Attorney
Durable power of attorney has the advantage of certainty. Until you revoke this document, your agent will be able to act on your behalf regardless of external circumstances. This can be particularly useful if you are unexpectedly absent or suddenly incapacitated. Your agent will be able to manage any financial, legal or medical affairs immediately, with no legitimate dispute over their authority.
That is also the disadvantage of durable power of attorney. Your agent will have the authority to act indefinitely, until you revoke the document. This makes it only appropriate for someone you can trust completely, such as a spouse, close family member or trusted attorney.
Springing power of attorney has the advantage of limiting that authority. You can reserve your grant of authority for necessary circumstances. Typically this means that you can reserve your power of attorney for emergencies, such as if you are incapacitated and unable to act for yourself.
However, a springing power of attorney has the disadvantage of uncertainty. If you are capable, you can confirm your agent’s authority. But if you are incapacitated or absent, it can take time and (in some cases) a court order to confirm your agent’s authority. This can create conflict in the worst possible circumstances.
Bottom Line
A durable power of attorney is a grant of authority which lasts indefinitely, ending only when you revoke the document or upon your death. A springing power of attorney is a grant of authority that does not take effect immediately, but only applies when certain conditions have been met. Both are common tools for making long-term plans, medical directives and living wills.
Power of Attorney Tips
- If you set up a power of attorney and then want to make changes, this guide explains how to do it.
- A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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