Estate Planning – Answers about Powers of Attorney Series #3

by Bob Frie

The majority of people who have powers of attorney have them in case they fall victim to an emergency in which they are unable to make medical decisions or handle their financial affairs. But even if they have a power of attorney many ask: When does a power of attorney take effect?

“The terms of a power of attorney dictates when it will take effect. There are two ways a power of attorney can take effect. The first is called a “springing power.” This means that the power of attorney will only take effect when an event described in the document takes place. Typically this would refer to a licensed physician determining the principal has become incapacitated. The second type is called a “standing power.” This type takes effect as soon as it is signed by the principal. A power of attorney can also contain a mixture of both concepts.”

Since there are powers of attorney that take immediate effect on their signing, this raises the question: Does a power of attorney take away a principal’s rights?

“No, a power of attorney does not take away a principal’s right to make decisions. An agent does not wield all of the principal’s power and can only make decisions in accordance with the principal.”

Thanks to the Colorado Bar Association for their concise information.

Stay tuned to our blog for more explanations and answers to common questions on powers of attorney.