What is a springing power of attorney?

A power of attorney, commonly referred to as a POA, is a legal document that grants someone else the authority to act on your behalf. By creating a power of attorney, you (the “principal”) bestow decision-making power to another individual, referred to as the agent or "attorney-in-fact." 

This delegated authority allows the agent to make important choices on your behalf, such as managing your finances, handling property matters, or even making healthcare decisions.

Importantly, a power of attorney is a voluntary arrangement and can only be established while the principal is of sound mind. You do not necessarily need a lawyer to create a power of attorney, but it often makes sense to consult with an estate planning attorney given the level of control that you will be entrusting to your designated agent. 

A principal can create multiple powers of attorney, or designate multiple agents within a POA, if they so choose. And typically, normal POAs are effective immediately, unless they’re springing POAs. 

How long a POA is good for depends on details such as the language in the document and what type of POA it is. (That said, all powers of attorney expire upon the death of the principal). 

Types of Power of Attorney

There are various types of power of attorney that grant different extents of authority. Here are a few examples:

• General Power of Attorney: the agent is empowered to act on behalf of the principal in all legal and financial matters. This includes managing bank accounts, selling assets, overseeing government benefits like Social Security, and making healthcare decisions.
• Special Power of Attorney:  the agent's authority is limited to certain circumstances. For instance, you can authorize an agent to manage a bank account or execute specific financial transactions. Under this type of power of attorney, the agent would have no control over the principal's other affairs.
• Financial Power of Attorney: the agent has the ability to manage financial affairs on behalf of the principal. This falls under the category of a special power of attorney.
• Medical Power of Attorney: an agent is designated with authority to make medical decisions on behalf of the principal if they are unable to make their own decisions.

These different types of power of attorney provide individuals with the flexibility to tailor the scope of authority based on their specific needs and preferences. It is essential to carefully consider the specific powers and limitations associated with each type.

If you have questions about what type of POA would meet your needs, it can be helpful to consult with an experienced estate planning attorney to ensure that any power of attorney document you sign accurately reflects your intentions.

A crucial distinction, particularly for understanding springing powers of attorney, is  the difference between durable POAs and regular, non-durable POAs.

The crucial distinction lies in whether a power of attorney remains effective when the principal becomes mentally incapacitated. A durable power of attorney remains in force even if the principal becomes incapacitated, whereas a non-durable power of attorney does not retain its validity. 

In some states, it is assumed by default that any power of attorney created is durable (for instance, in Pennsylvania). However, it is essential to verify the laws in your specific state, as the difference between durable and non-durable powers of attorney carries great importance.

So, how do springing POAs fit in? Again, the defining characteristic of a springing power of attorney is that it does not take effect immediately and instead only takes effect upon a certain condition. 

The most common example of a springing power of attorney is a durable power of attorney that only takes effect upon the incapacitation of the principal. This can also be referred to as a springing durable power of attorney, though people often simply call it a springing power of attorney. 

(Note, though, that anything referred to simply as a “durable POA” is probably not also a springing POA). 

Springing Power of Attorney Example

Let’s look at an example of a springing power of attorney to better understand what they are and how they differ from other types of POA. 

In the graphic below, the timeline shows when the different types of POA would be in effect with respect to a hypothetical injury to the principal. As you can see, the springing power of attorney (represented by the purple bar) is not in effect before the injury and “springs” into existence when the injury occurs and the principal can no longer make decisions on their own behalf. 

Another crucial concept in the context of springing POAs is to define what is meant by "incapacity."

Incapacity refers to a condition in which an individual becomes unable to make sound decisions or effectively manage their affairs. This can occur due to various reasons, such as advanced age, cognitive decline, or due to an injury.

Establishing incapacity can be crucial when it comes to a springing power of attorney. The power of attorney form will typically specify the conditions or events that trigger the activation of the agent's authority. This commonly includes a provision that the power of attorney only becomes effective when the principal is deemed incapacitated by medical professionals or a specific event occurs, as specified in the document.

It is important to note that the criteria for determining incapacity can vary depending on local laws and the specific terms outlined in the power of attorney document. For instance, it is typically necessary for a medical professional to certify that the principal is incapacitated or not legally competent to manage their own affairs.

But some jurisdictions require two medical professionals to certify, which is also a condition the principal could stipulate in the power of attorney document. 

Zooming out, why does the definition of incapacity matter so much for a springing power of attorney? Because it dictates when the document takes effect and, therefore, when someone else will have the authority to make legal decisions on your behalf.

And if the criteria are unclear, it could lead to a court battle if someone tries to override the actions of an agent under a springing POA. 

So, what is a springing power of attorney? Typically, it is a type of durable power of attorney that only takes into effect (i.e. springs into action) upon a certain event or condition, often the incapacitation of the principal.

Power of attorney documents are a critical aspect of a comprehensive estate plan, and it is never too early to start estate planning.

So whether you want to be sure someone is situated to make financial decisions if necessary, or you want to make sure that someone is authorized to make medical decisions on your behalf, a springing POA can help you plan for the future and give peace of mind.