Durable Power of Attorney: Springing vs. Non-Springing
Estate planning typically focuses on what happens to your assets when you die. But it’s equally important (some might say more important) to have a plan for making critical financial and medical decisions if you’re unable to make those decisions yourself.
That’s where the Durable Power of Attorney (DPOA) comes in. By signing a DPOA, you appoint a trusted representative (the “agent”) who can make medical or financial decisions on your behalf in the event an accident or illness renders you unconscious or mentally incapacitated. Typically, separate DPOAs are executed for health care and property. Without them, your loved ones would have to petition a court for conservatorship, a costly process that can delay urgent decisions. (In California, the health care DPOA document is known as your Advance Health Care Directive.)
A question your attorney may ask is whether your DPOA should be springing or non-springing.
To spring or not to spring?
A springing DPOA is effective on the occurrence of specified conditions e.g. when it “springs into effect”. By contrast, a non-springing DPOA is effective immediately. Typically, springing powers would take effect only if you were to become mentally incapacitated, comatose or otherwise unable to act for yourself.
A non-springing DPOA offers two advantages:
- It allows your agent to act on your behalf for your convenience, not just when you’re incapacitated. For example, if it’s difficult for you to get to the bank, or if you’re traveling out of the country, your financial DPOA agent could pay bills and handle other financial matters for you.
- It avoids the need for a determination that you’ve become incapacitated, which can result in delays, disputes or even litigation. This allows your agent to act quickly in an emergency, handling urgent financial matters without having to obtain a written statement from your doctor. that you are unable to manage your business affairs due to mental or physical incapacity.
A serious potential disadvantage to a non-springing DPOA — and a common reason people opt for a springing DPOA — is the concern that the agent may be tempted to commit fraud or otherwise abuse his or her authority. But consider this: If you don’t trust your agent enough to give him or her a DPOA that takes effect immediately, how does delaying its effect until you’re incapacitated solve the problem? Arguably, the risk of fraud or abuse would be even greater at that time because you’d be unable to monitor what the agent is doing.
Can a DPOA be changed or revoked?
Either form of DPOA is “revocable,” which means the signer can change or revoke the authority given to the agent. Since the signer must have legal capacity to understand the DPOA when it is created, s/he must also have capacity and be free of undue influence to revoke the DPOA. This is also true when signing a new form to appoint a different agent.
Using a DPOA to take property or to deprive an elder of property is financial elder abuse under California law. Here are some red flags to watch for:
- Lack of amenities the elder victim could afford
- Elder “voluntarily” giving inappropriate financial reimbursement
for needed care and companionship - Caregiver has control of elder’s money but is failing to provide for elder’s needs
- Caretaker “living off” elder
Confronting the elder abuser is sometimes all that’s needed to stop the illicit actions. If they continue, then court action or a conservatorship proceeding may be needed to protect the elder. It is possible under California law to demand a full Accounting or to revoke the agent’s authority by court order.
What to do?
- First, make sure you have signed these documents but only if you have a trusted representative (sometimes a court-supervised conservatorship is needed for protection):- An attorney-prepared financial DPOA is more comprehensive and protective against the risks of abuse. But a simple generic form is better than having none at all. The decision whether to give immediate authority to your agent, or to include “springing” language is up to you.
– There are many acceptable forms to create your own medical AHCD (click here for an Advance Health Care Directive form). Your health care providers will listen to your medical wishes and will only ask your agent if you cannot give “informed consent.”
– Another form gaining in popularity is the pink-colored Physician Orders for Life Sustaining Treatment (POLST). You may discuss the POLST with your doctor, who must sign this form with you. - Be sure to also include one or two Alternate Agents in case your first choice agent for some reason cannot act for you.
- Finally, the most important consideration is to choose carefully. Make sure you trust unconditionally the persons you designate as agents to carry out your wishes if you can no longer speak for yourself.
Please feel free to contact us with any questions you may have regarding DPOAs.