While Michael was waiting for his home in Texas to sell, he was vacationing with friends in California. Unfortunately, he took a bad fall and ended up in a California hospital. He had his Texas power of attorney, but the problem was that they were “springing” powers. They were only effective if Michael lost capacity. Michael’s capacity was fine, it’s just that he wasn’t in Texas when an offer on the house came through. As a result, the delay in Michael’s ability to respond and act on the offer cost him the good offer on his home.
A power of attorney is a legal document that allows someone else to stand in your shoes, to speak, and act on your behalf. A document that is effective immediately – even if you’re perfectly capable of managing your affairs at the time – would have provided a better outcome. Michael should have designated a Texas agent with immediate powers, in a document that was comprehensive enough to authorize the agent to conduct real-estate transactions on Michael’s behalf.
A document like Michael’s, however, that “springs” into life only on incapacity, would not serve him as he needed. And even if Michael had lost capacity, a doctor or more than one doctor (depending on the terms contained in the power of attorney) would still have to certify that he was no longer make his own decisions. This would also cause delay and uncertainty when swift action was required instead.
Some people may be concerned that if they have a power of attorney that is immediately effective, their agent will abuse privileges that aren’t even needed at the time. However, such reservations may be a sign, that they don’t trust that person which means they are likely ill-suited to be good selection as agent in the first place. Taking the time to discern this is important.
There are other creative options available, too. For example, a person could establish a limited immediate power of attorney only authorizing very specific actions or authorities. Or they might establish hybrid power of attorney that authorizes an immediate power for some agents while conditioning a springing power for others.
The takeaway here is to have a conversation with an experienced estate planning or elder law attorney who can help you find your way through many such pitfalls and help you make the best choice for you. Please contact us or schedule a meeting to discuss your situation. We are here for you and happy to help.
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Kevin Snyder is a husband, father, and an Orange County estate planning attorney and elder law attorney at Snyder Law, PC in Irvine, California. He's all about family and passionate about estate planning, elder law, and veterans. He founded Snyder Law to help people be prepared and have the peace of mind they are protecting their families and aging parents for when life happens.