When to Use a Springing Power of Attorney

Sometimes called a Conditional Power of Attorney, a Springing Power of Attorney is a type of Durable Power of Attorney document that only comes into effect after certain conditions are met, typically when the principal becomes disabled or mentally incompetent.  However, it could be used in a variety of situations.  For example, someone in the military might create a springing Power of Attorney to be prepared for the possibility of being deployed overseas or disabled, which would give a relative powers to handle financial affairs in these specific situations only. 

The main challenge associated with a Springing Power of Attorney is determining that the principal has become mentally incompetent.  When drafting this type of POA, it is advisable to include language that explains how mental incompetence will be determined.  One example is to require a doctor’s certification of mental incompetence.  If instructions are not included, it becomes more difficult to legally determine when the POA will go into effect.  In some cases when the requirements for determining mental competence have not been articulated in the document, the appointed agent is responsible for making the final determination.

Laws on this topic may vary from state to state. This content is not meant to provide you with complete information and it is not intended to be legal or tax advice. It is recommended that you consult with your own attorney, accountant or other advisor regarding your specific situation.