|
|
|
Power of Attorney Questions
Answer by Ken Golliher, BOL Guru
Guru Bios
Question: I know these are basic questions, but could someone please explain what is:
1) a springing power of attorney?
2) a durable power of attorney?
3) a nondurable power of attorney?
Answer: A durable power of attorney (POA) is one that stays in effect even though the principal is physically or mentally disabled. In order to survive the principal's disability state law generally requires that the document contain "magic language." For example, the uniform probate code (UPC) language is:
A durable power of attorney is a power of attorney by which a principal designates another his attorney-in-fact or agent in writing and the writing contains the words, "This power of attorney shall not be affected by subsequent disability or incapacity of the principal or lapse of time"or "This power of attorney shall become effective upon the disability or incapacity of the principal" or similar words showing the intent of the principal that the authority conferred shall be exercisable notwithstanding the principal's subsequent disability or incapacity, and, unless it states a time of termination, notwithstanding the lapse of time since the execution of the instrument.
A springing durable POA is one that is not effective at the time it is executed, but "springs" into existence upon the happening of some future event. Examples would be the principal's:
* physical or mental incapacity or
* military deployment.
Again, there is magic language involved. From the UPC provision above:
"This power of attorney shall become effective upon the disability or incapacity of the principal"
A nondurable power of attorney is simply one that has no magic language. If the principal becomes incapacitated or disabled there is an immediate cloud over the POA's continued validity; the attorney-in-fact's actions are subject to challenge. That cloud exists even though the principal has not been declared mentally incompetent, the law of agency depends on the concept that the principal is still capable of giving instructions to the agent.
If the principal is declared mentally incompetent in a judicial proceeding, that usually automatically revokes a general POA. It also empowers the court appointed guardian to revoke durable and springing durable POAs.
First published on BankersOnline.com 2/13/06
Privacy Policy Disclaimer Recommend This Site ! Contact Us
BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all banking professionals. Support our advertisers and sponsors by clicking through to learn more about their products and services.
|
|
|
|
Print Friendly!
Email This Article!
Discuss NOW!