Across the country, many adults often find the use of a Power of Attorney necessary, oftentimes, only when an issue arises in which the POA is needed. As consumers, understanding the three basic Power of Attorney products may ensure the POA is drafted long before the document is needed.
While is it a common, and an unfortunate fact of legal consequence, the use of Power of Attorneys is a misunderstood and, often, ignored piece of documentation by many adults. When faced with potential life changing situations, a Power of Attorney may provide the most reliable source of documentation in protecting the fundamental rights of an incapacitated adult. Let’s examine the three common Power of Attorney formats.
For adults who wish to supply a physician with the authoritative power to determine competency in handling future financial affairs, a Power of Attorney known as a “Springing POA” should be created. While the Springing Power of Attorney is commonly signed during a period in which the adult patient is fully aware of the decision making process, the effective date of the Springing Power of Attorney is granted a future date when a physician, selected by the adult, makes determination that the adult is no longer mentally or physically capable of handling financial decisions.
Similar to the Springing Power of Attorney is another POA known as a Durable Power of Attorney which provides for the assignment of another individual to handle the adult’s affairs even if the adult becomes mentally or physically incompetent. The difference between the Springing POA and the Durable POA lies in the effective date of the POA. Under the Durable Power of Attorney, the individual assigned with the rights is given those rights immediately and extending through any health status change by the adult. Conversely, the Springing Power of Attorney does not go into effect until such time as a physician has rendered the adult incapacitated.
And, yet, there is a third, more common, Power of Attorney. Known as a Non-Durable Power of Attorney, this document is most commonly used for temporary or specific transactions in which the adult is not able to participate, for whatever reason. Such transactions may be the cashing of stocks, banking services, selling or buying real estate or even to seek medical attention, on behalf of the adult, for a child. The Non-Durable Power of Attorney differs from the Durable Power of Attorney, and Springing Power of Attorney, in that the agreement is specific and attached to a limited transaction period.
With many adults seeking to establish life care plans, prior to the change in health status, part of the financial and medical planning should involve the consideration of a Power of Attorney, POA. When considering these documents, discuss the use of Durable, Non-Durable and Springing POA with a financial counselor or attorney as a combination of all three may be appropriate.
For more information regarding Power of Attorney documents, consult your location financial institution.
