A springing power of attorney (POA) could seem like an ideal estate planning tool. Unlike more durable powers of attorney, a springing POA only authorizes a trusted agent to make decisions after you’ve sustained a life-altering injury or been diagnosed with a disabling condition. Unless and until you’ve been found incompetent, you retain full control of your finances.
However, a springing POA is an imperfect tool that can carry big risks. Read more to learn about a springing POA, or contact Landskind & Ricaforte Law Group, P.C. to speak to a New York elder law attorney.
A Springing Power of Attorney in New York
A springing power of attorney lets another person or party make decisions on your behalf when you cannot make them for yourself. This person, termed your “agent” or “attorney-in-fact,” is entitled to make certain decisions and authorize transactions.
If you ever become incapacitated, a springing POA could let your agent:
- Pay your rent or mortgage
- Keep current on your cellphone bill and other utilities
- Make important medical decisions that you’re no longer capable of consenting to
However, a springing POA isn’t without its downsides. Here’s what you need to know about powers of attorney and the advantages of a springing POA and its potential pitfalls:
Understanding Powers of Attorney
“Power of attorney” is a generic term for any legally-binding document that lets somebody else act on your behalf. In New York, the most common powers of attorney include:
- General power of attorney. A general power of attorney lets your agent act on your behalf. If you are seriously injured in an accident or otherwise incapacitated, the power of attorney agreement will end.
- Durable power of attorney. The durable power of attorney is similar in scope to the general power of attorney. However, the durable power of attorney persists even after a finding of incapacity, expiring only when the principal voids the contract or after a set of other pre-specified conditions have been met.
- Springing power of attorney. A springing power of attorney only takes effect after the principal has been incapacitated. This lets the agent ensure that the principal’s finances are managed and their obligations met for the duration of their recovery.
Unlike general and durable powers of attorney, a springing power of attorney has less potential for abuse. Since it only “springs” into effect upon a finding of incapacity, the principal doesn’t have to worry about their attorney-in-fact misusing their privileges under ordinary circumstances.
The Advantages of a Springing Power of Attorney
A springing POA is a flexible tool that can be heavily conditioned to prevent misuse. Its most significant advantages include the following:
Flexibility
If you authorize a springing POA, you are entitled to define and detail the circumstances under which your agent is authorized to act on your behalf. In other words, with a springing POA, you decide when the POA “springs” and takes effect.
Limited Authority
Since a springing POA is only valid after certain conditions have been met, your agent cannot access your financial accounts unless you have been found incapacitated.
Peace of Mind
The limitations on a springing POA could help bolster your peace of mind: you’ll have an agent authorized to act in your stead should you ever fall sick or become seriously injured, but you won’t otherwise have to worry about your attorney-in-fact acting without your knowledge.
The Drawbacks of a Springing Power of Attorney
A springing POA may seem to offer enhanced flexibility with minimal risk, but it very often invites unexpected trouble. Some of the biggest drawbacks of this POA include the following:
Certifying a Springing POA Can Take Days
If your springing POA is structured to only take effect after you have become disabled or incapacitated, your agent will need to prove that you’re incapable of making decisions on your own. This usually entails:
- Contacting a doctor
- Asking the doctor to certify that your condition is disabling or incapacitating
- Serving copies of the certification to the correct institutions
Even if you’re in a nursing home or hospital, obtaining certifications can take hours, days, or even weeks. If your POA isn’t active, you could easily fall behind on bills or otherwise run into serious financial trouble.
Defining Incapacity Isn’t Easy
One of the most illusory advantages of a springing POA is that its delayed-action mechanism provides protection against abuse. However, for your POA to take effect, you must define what constitutes “incapacity” or “incompetence.”
You may need to consider:
- What happens if your agent and your doctor disagree on whether a condition is disabling?
- What should your agent do if you don’t need help every day?
- What will you do if you need help paying your bills, making rent, or managing a business before your POA can be executed?
New York law and precedent provide a framework for defining incapacity, but there’s always a gray area. Unless you’ve already been diagnosed with a condition like dementia or Alzheimer’s, defining where “incapacity” begins and ends is often much easier said than done.
You Might Not Recognize That You Need Help
People experiencing cognitive decline don’t always know when they need help. If you’re at risk for dementia, Alzheimer’s disease, or another neurodegenerative condition, you may not be able to recognize that you’re no longer of sound mind. You could miss bills, have your electricity turned off, or fall victim to a financial scam, all while insisting that you’re perfectly healthy. If you refuse to see a doctor, there’s little your agent can do to protect you without going to court.