Do you include springing clauses in your POAs so they only become effective after, say, the principal is deemed incompetent? Here's what other lawyers do, based on their responses gleaned from ISBA discussion groups.
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Should POAs have springing clauses?
Patricia L. Dennis, Edwardsville. For those of you who do POAs for healthcare and financial, do you usually put in a springing clause? If so, what is usually the [triggering] event?
ISBA lawyers respond
Sharon F. Banks, Northbrook. I almost always use them for property POAs. I use the language "upon a doctor's written certification that I am no longer able to manage my own affairs." I almost never use them for healthcare POAs because the doctor will always listen to the patient if the doctor believes the patient is able to understand what's going on and is able to make her own decisions. In an emergency, I don't want care delayed while they get a doctor…to certify the patient is not able to make her own decisions.
Thomas K. Leeper, Quincy. I almost never use one for a POA-HC [because]…executing a POA-HC does not take away the right of the client to make the decision, and the client is always present when such decisions are made.
I frequently use one for a POA-P (when the primary doctor states in writing that the client lacks decision-making capacity) if I am using a bank or other institutional entity as the agent; I only use one if the client strongly desires when I am using a relative as the agent, because if the prospective agent cannot be fully trusted to refrain from using the POA when the client otherwise would not want it used, a different [agent] should be selected.
Dawn Weekly, Sandwich. I'm an elder law attorney, and POAs and their execution and use are part of my everyday practice. For my elder clients, I never use springing POAs. [I]ncapacity rarely happens at a specific point in time. [For most clients], their kids are already handling the checkbook for them, or at least writing out checks for Mom or Dad to sign. The POA is just an official authorization for what the child is already doing.
Also, at least 75 percent of my clients come in with their kid's name (generally, there's one caretaker child, usually a daughter) on their accounts...i.e., they've changed the checking account to joint tenancy for purposes of convenience, without realizing that they have effectively made their checking account the property of the child [and] that child can exclude other children from getting the money at the parent's death.
In short, the vast majority of my [elderly] clients are resorting to self-help…. Yes, we're living longer..., but we're also generally getting more medical care and taking more medications and, I have to believe, suffering from more mental decline due to the foregoing. This has resulted in a greater need for POAs prior to death.
I never use springing POAs for healthcare either, because…if the principal is still capable, the doctors will abide by the principal's wishes. The more practical use of the HC POA, in my experience, is [to encourage doctors to] discuss the principal's care with the agent. It's like a super-HIPAA authorization. When someone is at the point where the agent is actually making the decisions because the principal can't... you're not looking at a long-term situation, let's just say it that way….
For property POAs, I help advise principals as to the qualities that are helpful for an agent, but I also admonish the agents as to their duties and responsibilities. I tell them stories of clients who had "bad children POAs" and what happened... i.e., how, exactly, the criminal charges were filed.
Of course, my elder clients have generally agreed that I can discuss their case with their children, and in many cases the children and the parents come to see me together. That makes it easier to advise both sides as to the risks and duties, but [that could be] harder if the principal is the only person you have in front of you. If you have concerns [about the agent], you could ask the client to authorize you to discuss duties and responsibilities with the nominated agent on their behalf.