A Durable Power of Attorney (DPOA) is an important part of your estate plan. It allows someone else to handle your affairs should you not be able to. But when should it become effective, immediately or just when you need it?
A DPOA can be drafted in two different forms. One form takes effect a soon as you execute the document and remains in effect if you become incapacitated. The other, known as a “springing durable power of attorney,” does not become effective until you become incapacitated.
The document typically includes language that you are incapacitated once a doctor finds you are no longer able to handle your affairs. Sometimes the springing durable power of attorney is drafted to require two independent doctors to determine that you are unfit to handle your affairs.
Potential Difficulties with a Springing Power
A springing DPOA does create some difficulties for your agent. Before they can begin to manage your affairs, he or she must get a certification from a doctor (or two doctors depending on the language in the document) that you are incapacitated. At the minimum, this will cause delay. Furthermore, a doctor may not be willing to provide the certification unless you have also executed a valid HIPAA release allowing the doctor to reveal your medical condition.
Even with the certification, some individuals and institutions may be hesitant to accept the springing DPOA and question its validity. You can avoid the disability certification problems of a springing DPOA by executing a DPOA that makes the powers immediately effective, but then not giving the document to your agent until it is necessary.
As long as the agent knows where to locate the document, this method can be a simple solution to the dilemma of not wanting to grant immediate powers but also not wanting to be burdened with the certification requirements of a springing power.
When Your DPOA Ends
So that's when it begins/becomes effective, but when does it end? Your agent’s powers end when you:
- Die
- Revoke the power of attorney, or
- Divorce the agent if he or she is your spouse
If your spouse is your agent and you decide to divorce, the best course of action is to revoke the power of attorney immediately. Your agent’s powers also end if he or she becomes incapacitated or is removed by a court.
So What Should I Do?
I recommend that everyone have an estate plan that includes a Durable Power of Attorney. If you want more information about them, what documents are included, and things you need to think about to prepare them, then I recommend that you download my free book, A Guide to Creating Your Estate Plan. It will get you a long way towards achieving that goal.
But if you live in Burlington, Camden, Gloucester, Salem, or Cumberland counties, have decided that you need to put together an estate plan, and are ready to move forward to create one, then just click here to schedule a free, no obligation phone call to get things started.
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