Springing power of attorney is a formal legal agreement that vests someone with power of attorney only in the case of a springing event. Springing powers of attorney are valid in the United States, England and most other countries that recognize a power of attorney designation. A springing power of attorney can be an important estate planning tool and an important way to ensure a person's assets are protected in the event of injury or incapacitation.
A power of attorney gives another individual an ownership and controlling interest in a person's affairs. The person who is granting the power of attorney is referred to as the principal or the grantor. The person who is vested with the power of attorney is referred to as the agent or the attorney in fact.
A principal can grant limited power of attorney or absolute power of attorney. The grant of authority authorizes the agent to act on the principal's behalf to the extent of the authority. For example, power of attorney can be granted over a bank account, over an entire estate, or over the right to make health care decisions.
The agent who is acting on behalf of the principal has a fiduciary obligation to act in the best interests of the principal. This means that the agent who is vested with the authority to act in the principal's interests must actually act for the principal. He or she must not do any actions that would endanger the principal's well being.
When a springing power of attorney is granted, the power of attorney does not become active immediately. In other words, the principal vests authority in the agent to act on the principal's behalf, but the agent does not have this right or authority right away. The springing power of attorney ensures the authority will only vest or become active upon the occurrence of a specific event.
The written documents creating a springing power of attorney must state the specific event that causes the power of attorney to become active. For example, the principal creating the springing power of attorney can specify that the agent's authority vests or becomes active if the principal becomes disabled, or if the principal suffers from a specific illness. If and when the event occurs, the agent is vested with authority. He generally must show that he has this authority by producing the power of attorney documents and some evidence that the event has occurred which caused the power of attorney to become active. This evidence can be in the form of doctor's certification, for example.
