How a Springing Power of Attorney Works
A springing power of attorney only comes into effect if you become incapacitated. With most power of attorney forms, once you sign the papers, the person you've named as your agent becomes your attorney in fact immediately. A springing power of attorney differs slightly.
For some people, they are not comfortable knowing someone holds the power to access their accounts at any time while they are still healthy. They prefer springing power of attorneys that block a person from acting as their attorney in fact until they become incapacitated. There may never be the need for that person to assume the duties listed in the power of attorney letter.
Springing Power of Attorney Benefits
A springing power of attorney does protect your assets by keeping your accounts out of someone's hands unless is is critical. You cannot predict if you will need a power of attorney at any point in your life. With a springing power of attorney, you have the power to only authorize attorney in fact duties if it is absolutely necessary.
Downfall to a Springing Power of Attorney
The biggest problem with a springing power of attorney is the delays caused. Before the springing power of attorney agent takes over your financial, legal and business matters, they must prove you are incapacitated. This means seeking medical letters proving you are unable to perform the duties listed in the power of attorney letter.
Getting the letters from a doctor and submitting it as proof can take time. Meanwhile, the duties that person is supposed to be handling are ignored for days or even weeks. It can also lead to expensive court hearings.
If the matters the power of attorney is supposed to handle are time sensitive, such as taxes or payroll. Your attorney in fact will then be faced with angry workers or stiff IRS penalties. They won't care that the agent's permission is pending a settlement. They'll want their money when it's due.
If you do decide to use a springing power of attorney, notify your doctor in advance so that he knows medical proof may be necessary in the future and that expediting this letter will be important.
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