Dear Mr. Premack: I went to your website for information on powers of attorney. I understand the difference between a durable power of attorney and a medical power of attorney. What I don’t get is the difference when you talk about a springing power of attorney. What is the difference between durable and springing? Aren’t they both so I can choose someone to help with my finances and pay bills for me? Thanks. – H.R.
Thanks for visiting my website. You may have been looking at the Virtual Online Law Office questionnaire that asks if you desire a power of attorney that is durable or springing. Or you may have been re-reading my June 3, 2011 column (“Why is bank demanding a Doctor’s letter for wife to use POA?”). In that column, I said that a springing power of attorney is simply a durable power of attorney for which the starting date has been shifted forward in time.
In other words, when you sign a general durable power of attorney, it goes into effect on the day you sign it. Your agent has authority as of that moment. When you sign a springing general durable power of attorney, your agent must wait until you become disabled before authority begins. But whether your power of attorney is durable or springing, its intention is to allow you to authorize someone you trust to help manage your assets.
Here are other common questions that I receive about springing general durable powers of attorney:
1. What does it mean to become “disabled” in this situation?
When I write a springing general durable power of attorney for someone, I include two trigger mechanisms. First, you can decide for yourself that, in your own judgment, whether you are disabled. You then sign a notarized affidavit to that effect, and your agent’s powers commence. Second, your physician can determine, after examining you, that you have suffered a substantial impairment in the ability to care for yourself or to manage your assets due to illness, injury, or mental impairment. Your physician then signs a notarized affidavit to that effect, and your agent’s powers commence.
If you rely solely on the statute, then there is only a single trigger mechanism. When a physician certifies in writing that you are mentally incapable of managing your assets, your agents powers commence. I have always thought that my broader approach (which is fully allowed under Texas law) is more useful than the limited statutory approach.
2. How will my agent know that I have become disabled?
Most often you will have designated an agent (and alternate agents) who are close to you. As such, they know you and keep tabs on your health condition (albeit very informally). If you have selected someone more distant, like a bank trust department in conjunction with a standby living trust, then you must work out a way for the representative to stay updated on your condition. A daily phone call is often a very useful method.
3. How does my Agent proceed when I become disabled?
After obtaining the written affidavit evidencing your disability, the agent has power to act within the limits you set in the power of attorney. The Agent would show the affidavit and your power of attorney to your bank, broker and others. They will then accept your Agent’s instructions so that your assets can continue to be properly managed. Your agent is your fiduciary, and must always act with your best interest as the highest goal.
If your primary agent dies, resigns or is disabled, your Alternate Agent takes over. The same evidence of disability would be gathered by the Alternate Agent – who would then display a) the affidavit that you are disabled, b) the statement that your primary Agent is disabled (or has died, or has resigned), and c) the power of attorney.
Paul Premack is a Certified Elder Law Attorney practicing estate planning and probate law in San Antonio.
Original Publication: San Antonio Express News, July 8, 2011