Springing Power of Attorney Definition:
A power of attorney which becomes legally effective on the occurrence of an event (such as incapacity).
Enduring or Continuing Power of Attorney
Power of Attorney
Limited Power of Attorney
A power of attorney
that takes effect only upon the occurrence of a specified event.
A power of attorney which postpones the date on which it is to take effect to the expiration of a stated time or after the occurrence or non-occurrence of a specified event.
In Goodrich v The Registrar of Land Titles, the British Columbia Court of Appeal stated:
"The term springing refers to a power of attorney that enables an attorney to act upon the satisfaction of a condition. There are examples in the common law of a power of attorney that sprang, for example upon the donor’s absence abroad....A springing power of attorney ... sets the condition for its use on its face"
A power of attorney (POA), as with any written contract, takes effect when it is signed.
However, some jurisdictions, such as Alberta, British Columbia, and many American states including New York, allow a donor to delay the enabling of a power of attorney to a time other than when it is signed. The most common example is a person with diversified or substantial assets, or with a small pool of candidates as prospective attorney and who is, rightfully so, concerned with the powers extended in a general power of attorney.
A power of attorney creates a clone of the donor. An incompetent or dishonest attorney can wreck havoc on the donor's financial and legal affairs.
At common law, a power of attorney automatically expires upon the donor’s incapacity to manage their affairs. This acts as a precaution since an incapable donor can no longer revoke a power of attorney. However, where the laws of a particular jurisdiction allows it (and many do not), a power of attorney can be stated to continue or endure even in the event of the donor’s subsequent incapacity (this is called a continuing or enduring power of attorney).
The laws of the donor’s jurisdiction should be consulted carefully to ensure that there is legislation enabling continuing/enduring or springing powers of attorney.
Although, barring any condition or limitation to the contrary (such as making it springing), a power of attorney takes effect when it is signed, until the attorney actually has knowledge of, or possession of the power of attorney, the donor is relatively safe. The donor has no tool to act upon, or no access or knowledge of it.
Some clients ask a lawyer, or some other third-party, to hold onto the power of attorney and not to give it to the attorney except under specified conditions. This is precarious as it defers to the judgment of a third-party.
So many donors wish to defer the moment the power of attorney takes effect to the moment it is actually needed; that the whole point of a power-of-attorney is only for someone to act as their legal and financial clone when they are mentally incapable of managing their own affairs.
Thus, the springing power of attorney, as in:
"This power-of-attorney is to take effect upon the written certification by a physician licensed to practice medicine in the State of New York, that I am mentally incapable of managing my affairs."
Note that the wording is inclusive of total physical incapacity such as a coma as whatever the physical disability may be, as long as it renders the donor mentally incapable of managing his or her affairs, the POA springs to life.
Like any power of attorney, a springing power of attorney dies with the donor or can be revoked at any time by the donor except, of course, when they are incapacitated; unable to manage their affairs.
A significant disadvantage to a springing power of attorney, other than that it is of no force or effect until the specified event occurs, is that it is not very helpful for people who use powers of attorney to have their affairs managed by their attorney when they travel internationally. If that is the point of your power-of-attorney, keep this comment in mind when considering a springing power of attorney.
Categories & Topics: