Springing power of attorney becomes effective upon incapacity, while a current power of attorney is effective immediately.
What are the key differences between a springing power of attorney, which becomes effective upon incapacity, and a current power of attorney, effective immediately? What important factors should one consider when deciding on which type would best protect one’s assets and meet the estate planning goals?
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One should carefully consider the differences between a springing and a current power of attorney to protect his assets effectively.
A springing power of attorney, which becomes effective only upon the principal’s incapacity, is designed to limit the agent’s control until necessary, safeguarding the principal’s assets until they can no longer manage their affairs. This type of power is useful for providing security and reducing the risk of misuse.
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In contrast, a current power of attorney is effective immediately upon execution, granting the agent immediate authority to act on behalf of the principal, as governed by the Powers of Attorney Act, 1882.
This is beneficial for immediate assistance but requires a high level of trust in the agent. Individuals should assess the level of trust in the chosen agent, the purpose and timing of the power of attorney, ensure legal clarity and specific limitations of the agent’s powers, and regularly review and update the document to reflect his current needs and circumstances.
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These considerations will help create a power of attorney that aligns with his estate planning goals while protecting his assets from potential misuse.
