Hyden, Miron & Foster, PLLC Law Blog

Monday, February 23, 2015

What is the difference between an immediate and a springing power of attorney?

financial power of attorney is an important document that is beneficial for everyone to have. It allows others to handle your financial affairs if you are unwilling or unable to do so. The person with this ability, known as the agent, should be someone you trust completely. Anyone you designate as agent should be honest, dependable, and have the necessary skills to effectively manage your finances.

A financial power of attorney can be broad or narrow. You can allow your designated agent to have access to all of your financial accounts, holdings and investments, and make all financial decisions on your behalf, including selling real estate. Alternately, you can prepare a financial power of attorney authorizing an individual to have access to a checking account and pay only specific bills (perhaps mortgage, utilities, and insurance) in the event that you become incapacitated. This ensures that your house will be kept in order and that related accounts remain up to date while you are unable to manage them.

Your agent has a fiduciary duty to you, so the agent must act in your best interest and not abuse the power granted to him or her for self-benefit. If dishonest decisions are made, you can revoke the power of attorney, name another agent, and sue the former agent to get your money back.

Powers of attorney can be "immediate," which means they go into effect as soon as they are signed, or they can be "springing," which means they go into effect after a certain event. Typically, a "springing" power of attorney springs into effect when the person creating the document becomes incompetent, mentally or physically, and is no longer able to handle his or her financial affairs. This usually requires a doctor to certify the person as incompetent.

If you have questions about how a financial power of attorney could help you or a loved one, call estate planning attorneys Hyden, Miron & Foster, PLLC, today at (501) 482-1787 or (888) 770-1848.

 


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