Should a Power of Attorney “Spring”? Delay v. Abuse
Feb. 5, 2015
Powers of Attorney for health care or property can provide valuable protections in the event you become incapacitated. A health care power of attorney offers the peace of mind associated with the knowledge that medical decisions are being made by someone you know and trust. While family members and friends can go to court to seek a guardianship or conservatorship (depending on the state) to obtain authority to make these decisions, a health care power of attorney prevents unnecessary delay and expense. Similarly, a durable power of attorney for property can provide a tool to prevent your financial affairs from being neglected when you lack the capacity to handle your finances.
Despite the benefits of power of attorney (POA) documents, there are important issues that must be considered if you have decided to have either form of POA drafted. One of the most important issues to be considered is whether you should include a “springing” feature in your POA. This feature involves whether a POA becomes effective immediately upon execution of the document or only after you are determined to be incapacitated.
Delay v. Abuse
The decision about whether to create a POA that springs into existence usually depends on balancing competing considerations regarding potential abuse by the selected proxy and the inconvenience of delay. Some people who favor a springing POA prefer limiting the potential for misuse of this authority. The theory is that the person designated as the agent might engage in unauthorized or undesirable financial transactions under a financial power of attorney if the document is made immediately effective.
While this objection legitimately recognizes a potential risk of abuse, there are factors that mitigate this risk. First, the “attorney in fact” under a POA is bound to act in a fiduciary capacity to protect the financial interest of the principal. If the agent abuses the authority of this fiduciary relationship, the principal might have the right to pursue both civil and criminal legal action. Even if the principal disregards potential liability for violating this trust relationship, the principal always faces this risk when selecting an agent regardless of whether the agreement takes effect immediately or on a springing basis.
By contrast, a springing POA regarding property handcuffs the agent in terms of the ability to promptly protect the interests of the principal. The time involved to jump through the hoops to make the POA effective can create problems. If a requirement is included, such as an examination by three medical professionals to determine that the principal is incapacitated, the lapse in time can mean that bills go unpaid, checks undeposited and important financial transactions unhandled. Many power of attorney forms do not specify how incapacity will be determined, which could necessitate the cost and delay of initiating guardianship or conservatorship proceedings. Since avoiding the need for these types of legal action provide one of the reasons for creating a POA, this disadvantage of a springing POA can make the document essentially ineffective.
If you have a springing health care power of attorney, your proxy might well be acting during a medical emergency, such as in the wake of a car accident that causes a lengthy coma. Emergency circumstances often require medical decisions prior to disability being established.
If you have questions about a power of attorney in Kansas, we welcome the opportunity to talk to you and answer your questions. We invite you to call the Weber Law Office or to submit an inquiry form through this website to schedule your initial consultation with an experienced Wichita estate planning lawyer.