You may be in a situation where a parent is losing the mental capacity to make important financial decisions, but is still competent enough to handle such matters with just a little help. Should you name a designated power of attorney, or use a springing power of attorney instead? This can be a difficult decision, as a springing power of attorney has both positives and drawbacks. 

Aging Care explains that as soon as a person signs a durable POA, the POA will become active immediately. The durable POA will possess the ability to make financial decisions on behalf of a person, known as a principal, whether the principal suffers incapacitation or not. However, this is not the case for a springing power of attorney. 

Benefits 

With a springing POA, your parent can name a person to become a POA but the POA will not become active right away. A springing POA document contains a provision that “springs” the POA into effect. You might specify that the springing mechanism is when your parent suffers incapacitation and can no longer make important financial decisions. 

You might find a springing power of POA attractive because it does not strip your loved one of decision making authority unless the situation calls for it. It also allows you to work out a power of attorney situation in advance so that the mechanism is in place in case your parent suffers incapacitation and you want the POA to go into effect right away. 

Negatives 

However, you have to compose a springing POA very carefully. If you are going to condition a springing POA on the incapacitation of your parent, you need to specify what kind of incapacitation would trigger the POA. An unclear trigger may give your POA premature authority to act, or it can also delay the POA from going into effect. 

The result could be a court battle where a judge has to determine whether your parent has met the standards for incompetency and if the POA can take over decisions for your parent. You might require that a medical professional certify that your loved one has suffered incompetency before the springing POA takes effect. While a springing POA can be effective, it requires precise drafting so the standards for defining the incompetency of a person are clear.