Immediate versus Springing Power of Attorney for Property

In general, the Principal can provide limits to the Power of Attorney for Property, such as when the Agent can act or over certain types of property or even for a single particular transaction (i.e sale of a home, transferring a particular asset, etc.).

The Principal can also choose to have the power of attorney take effect immediately or it can become effective upon the occurrence of a certain event, such as incapacity. A power of attorney effective immediately is know as an “immediate” power of attorney. A power of attorney effective upon the occurrence of an event is known as a “springing” power of attorney.

The advantage of an immediate power of attorney is that the Agent can act on behalf of the Principal without delay. The disadvantage is that it empowers an Agent to act on the Principal’s behalf at a time when the Principal may not want or need the Agent to do so. It is important that the Principal completely trust the Agent appointed, as that individual is in a position to easily perpetrate a fraud upon the Principal.

The advantage of a “springing” power of attorney is that because it only becomes effective upon the occurrence of a certain event there is less risk of an Agent perpetrating a fraud on the Principal. The disadvantage is that it can cause delays and extra expense. For example, if the power of attorney becomes effective when the Principal is incapacitated, then it may take time to determine incapacity. Another risk is that an individual or institution to whom such a power of attorney is presented may not be satisfied that the specified event has occurred and may refuse to recognize the Agent’s authority to act for the Principal. It is very important that the specified event be spelled out clearly in the power of attorney.