Understanding the Difference Between a Durable and a Springing Power of Attorney

Understanding the Difference Between a Durable and a Springing Power of Attorney

lawyer icon, estate planning attorneyA significant division exists between springing and durable power of attorney and it is important to understand how these differences may impact a person’s financial and medical decisions in the future. A durable power of attorney takes effect the moment that it is signed. This is useful in ensuring that authority is clearly vested. Conversely, a springing power of attorney takes effect when the grantor is incapacitated. Springing powers of attorney reserve more authority for the grantor but at the expense of clearly-vested authority.

Powers of Attorney

POAs grant someone the authority to make decisions on behalf of another person. Decisions may include entering into binding legal relationships, selling assets, and making financial investments. POAs are also used to ensure that people who are unable to make medical decisions (i.e., aging parents or children with developmental issues) receive the care they need.

POAs sometimes impose fiduciary duties on the attorneys-in-fact, requiring them to place the interests of the grantor ahead of their own. Despite these protections, POAs are east to abuse Therefore, they should only be granted to a person who is trusted by the grantor.

Types of Powers of Attorney

When deciding whether to choose a springing or durable power of attorney,  understanding the advantages and disadvantages of each can help people make informed decisions.

A durable POA comes into effect the moment that it is signed. Durable POAs are ideal for individuals who experience occasional moments of clarity – like those suffering from degenerative mental diseases like dementia. Durable POAs ensure that the grant of authority explicitly enables the attorney-in-fact to take swift action. However many people steer away from DPOAs because they allow someone else to make important decisions even when the grantors are mentally capable.

Contrariwise, springing POAs ensure that the grantor can retain their autonomy for as long as possible. A springing POA takes effect when the grantor becomes incapacitated. There is often language in a springing power of attorney that dictates what events trigger the incapacity and when an attorney-in-fact is given control. Even when incapacity is spelled out in great detail, however, complications often arise that make it difficult for an attorney-in-fact to access bank accounts, medical information, or otherwise enforce his or her authority.

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