What Kinds of Powers of Attorney Are There? – Annapolis and Towson Estate Planning
A “durable” power of attorney remains in effect once the principal is deemed incompetent. On the other hand, a “springing” power of attorney is ineffective until the principal is judged incompetent, according to Fed Week’s recent article entitled, “‘Springing’ vs. ‘Durable’ Powers of Attorney.”
Some people prefer a springing power, so no one will be authorized to act on their behalf while they’re still capable.
A springing power might go into effect after two physicians have certified your loved one’s incapacity.
Nevertheless, some experienced estate planning attorneys prefer a full power of attorney rather than a springing power of attorney because if your loved one becomes incapacitated, the situation will be stressful enough.
You also don’t want hassles and waste time and energy at the bank or their brokerage firm. It may not be easy to establish the principal’s incompetency and put a springing power into effect.
In addition, some financial institutions are highly reluctant to accept powers of attorney unless their forms are used. These banks and credit unions may be concerned about the liability they might have if they allow transactions under a form that’s not valid.
Therefore, you should make sure that your financial institutions will accept your power of attorney.
In addition, it’s probably better to have just one person authorized to exercise the power.
If two or more people are named, the financial institution may insist that they all sign off, even if one party is authorized to act alone.
You can see that using a joint power is more cumbersome.
Ask an experienced estate planning attorney to help you draft an effective power attorney for your specific circumstances.
Contact us to schedule a complimentary initial call with one of our experienced estate planning attorneys.
Reference: Fed Week (May 1, 2023) “‘Springing’ vs. ‘Durable’ Powers of Attorney”
Sims & Campbell, LLC – Annapolis and Towson Estate Planning Attorneys