Estate planning encompasses far more than the eventual distribution of assets and inheritances. For many New Yorkers, a comprehensive and well-considered estate plan acts as a contingency. Different powers of attorney can help ensure that a grantor remains in a position to advocate for their own interests, even if they have been incapacitated by an accident or disabled by an age-related illness.
The springing power of attorney, which delegates the authority to make financial and medical decisions on the principal’s behalf, can be conditioned to trigger only upon the onset of an incapacitating event. However, the springing power of attorney has distinct drawbacks that can make it difficult to enact and enforce.
The Springing Power of Attorney in New York State
A springing power of attorney is a legal designation that authorizes a trusted third party to make financial and medical decisions on the principal’s behalf. Unlike other powers of attorney, the springing power of attorney only takes effect once certain conditions have been met. These conditions typically relate to medical and mental incapacity.
If the specific conditions detailed in the original springing of power document are not met, then the principal’s attorney-in-fact cannot execute the springing power of attorney.
The Empire State’s Legal Requirements for a Springing Power of Attorney
New York’s Consolidated Laws define the legal requirements for a springing power of attorney document. Under most circumstances, a springing power of attorney must:
- Be typed or printed in clear, legible text.
- Be signed and dated by the principal.
- Be recognized by a notary public.
- Be stamped and dated by the agent before a notary public.
A springing power of attorney document should include specific language stating that the power of attorney should only take effect upon the principal’s incapacity. The principal can also explain, in detail, what they define as incapacity, and how such incapacity must be validated.
The Disadvantages of a Springing Power of Attorney
While the springing power of attorney can, at least on paper, protect a principal’s personal interests in the event that they are ever incapacitated, it has distinct disadvantages. These disadvantages include, but are not limited to, the following:
Delays
Since the springing power of attorney typically stipulates that the principal attorney-in-fact can only assume the power of attorney upon incapacity, the attorney-in-fact may be required to obtain a formal determination of incapacity. A physician or other medical professional usually issues a determination of incapacity. If a doctor is not immediately available, then the springing power of attorney could be rendered inert, preventing the attorney-in-fact from taking any constructive action.
Legal Restrictions
The release of sensitive medical information is controlled by the federal Health Insurance and Portability Act, or HIPAA. Under HIPAA, medical professionals can only divulge information about a patient’s medical condition under limited circumstances. Even if a springing power of attorney is reinforced by a medical release authorization, hospitals are sometimes reluctant to engage with attorneys-in-fact for liability-related reasons.
Conditions
A springing power of attorney document should provide a definition of what constitutes “incapacity.” Once incapacity has been defined, the springing power of attorney cannot be triggered under any other condition. This limitation can make it significantly more difficult for the principal to seek assistance if they are no longer in a position to make independent decisions but cannot legally be considered incapacitated.
The springing power of attorney may seem appealing, as it prevents the attorney-in-fact from asserting control over the principal’s finances when the principal remains in good health. However, the disadvantages of a springing power of attorney cannot always be mitigated. Unavoidable delays, legal restrictions, and condition-related restrictions could make the execution of the springing power of attorney challenging.
Before committing to a springing power of attorney, ask your estate planning lawyer about any alternatives.