Dear Mr. Premack: My husband is incapacitated and I am agent under
his Power of Attorney. Recently I placed some of our assets in a ladder of
CDs. I opted to have these in my name with my husband as beneficiary,
thinking this would provide protect his rights without my having to use
his Power of Attorney. Using the Power of Attorney has been troublesome in
the past as I have been asked to provide a "current" doctor's
authorization. Have I handled the CDs in a legal way? I am particularly
concerned since I am 87 and it is possible my daughter will have to deal
with this if I should predecease him. – E.K.
Ordinarily, using a
power of attorney does not require any type of doctor’s authorization.
Even though you did not say so, I therefore suspect that the power of
attorney which your husband signed is a “springing” durable power of
Let me define the legal terms. A “power of attorney” is
any document which appoints an agent, giving that agent authority to
handle some type of transaction on behalf of the principal. A power of
attorney can be “general” or “limited” in scope. A general power of
attorney is very broad in the scope of powers given to the agent,
essentially saying, “Whatever I can do, you can do on my behalf.” A
limited power of attorney is narrow in the scope of powers given to the
agent, for instance saying, “You can sell my car for me.” Either way, the
grant of power begins at the moment the principal signs the power of
Whether a power of attorney is general or
limited, it is only valid during a time period in which the principal is
competent and could perform the particular actions which have been
delegated to the agent. This a “regular” power of attorney, because it
uses the default legal position (that the power of attorney ends when the
principal becomes incapacitated).
In your husband’s case, and in
many situations, a regular power of attorney is completely inadequate. It
would give you absolutely no authority to act on his behalf during his
incapacity when you most need that authority. To allow a power of attorney
to continue even when the principal is incapacitated, a law was passed
which authorizes “durable” power of attorney.
A “durable” power of
attorney contains the statement that, “This power of attorney is not
affected by the disability or incapacity of the principal” and continues
to allow the agent to act for the principal even when the principal has
become incapacitated. Thus the time period using a durable power of
attorney is extended beyond that of a regular power of attorney.
Additionally, a durable power of attorney is typically also a general
power of attorney.
Now we get to the final concept. A “springing”
power of attorney is a general durable power of attorney in which the time
period has again been shifted. Instead of beginning when it is signed by
the principal and ending upon disability (like a regular power of
attorney), a springing power of attorney begins when the principal becomes
disabled. It continues until it is revoked, until the principal recovers,
or until the principal dies. A springing power of attorney is the polar
opposite of a regular power of attorney.
Any springing durable
power of attorney requires evidence that the principal is incapacitated.
An elderly person’s incapacity can be permanent (like dementia) or can be
temporary. Hence, you have been asked to provide “current” proof of your
husband’s continuing disability with a doctor’s letter stating that he is
incapacitated. That letter triggers his springing power of attorney, and
is a precondition to your exercising authority on his behalf.
ask if you handled the CDs in a legal way. Yes, what you did is legally
valid. If your husband dies first, you have control over the CDs. If you
die first, he gets them. If he had the foresight to include your daughter
as successor agent, then after you die she can manage the funds using his
springing power of attorney. She will face the same demand for a doctor’s
authorization until he dies, and then she’ll need to probate his Will to
disburse the funds according to his wishes.
Author's note: for MORE on springing durable powers of attorney, read
the July 11, 2011 column which follows-up on this topic.
Click here for that column.