All About Estates

To Spring, or Not to Spring!

Today’s blog is being brought to you by guest blogger, Tracy Parkinson, a law clerk in the Private Client Services group of Fasken LLP.

Recently I have noticed that many meeting agendas for group discussions of estates practitioners that I have attended have included some aspect of the challenges, use and safekeeping of powers of attorney for property. Depending on the audience, the discussion can go in many different directions, unfortunately often without providing any final resolution.

I would like to focus specifically on the use of “non-springing” vs. “springing” powers of attorney for property. A “non-springing”, or “continuing” power of attorney for property is effective as soon as it is signed.  In contrast, a “springing” power of attorney for property “springs” into effect at a specified time (typically, such date as the grantor is incapacitated).  Both types of powers of attorneys have pros and cons which I have set out below.  For a more detailed review of powers of attorneys for property, I direct you to a blog entitled “Powers of Attorney for Property: An In-Depth Review“, written by my colleague, Brittany Sud.

The Pros – Non-Springing

  • allows the attorney to begin acting immediately and with ease.
  • may provide the grantor with some peace of mind that their attorney will be able to begin acting without delay when the time comes.
  • an institution is more likely to accept the power of attorney and allow the attorney to begin acting without delay.

The Cons – Non-Springing

  • greater potential for misuse and abuse by an attorney and an attorney may begin acting without the grantor’s knowledge or consent.
  • careful safekeeping is required, keeping in mind that the document must also be accessible.
  • an institution may feel compelled to perform some due diligence in any event.
  • depending on the client’s instructions, a law firm holding a power of attorney in safekeeping may have a significant level of responsibility/liability when they are asked by an attorney to release an original.

The Pros – Springing

  • safeguards are built into the document.
  • may provide some comfort to the grantor that his or her attorney is not able to begin acting until the springing date or event.
  • there is a reduced risk of misuse and abuse.
  • provides third parties with a clear understanding of when the document can be used.

The Cons – Springing

  • often provides reduced flexibility of use and may cause a delay in the attorney’s ability to begin acting if a capacity assessment must be obtained first.
  • because a grantor cannot predict the process of their incapacity, they may effectively prevent their attorney from acting at a time when it is needed.
  • it is possible that a grantor has diminished capacity but is still managing his or her property and may not be willing to have their capacity assessed. It may be necessary to obtain a court order to have the grantor’s capacity assessed causing delay and significant expense.
  • requires clear instructions about how the grantors incapacity is to be evidenced. The lack of clear instructions may derail the effective activation of the power of attorney.

I would like to canvass this audience about whether their clients generally prefer to prepare a power of attorney for property that is springing or non-springing. Given your experience, and the points discussed above, I invite you to leave your vote in the comments section below this blog.

About Corina Weigl
Corina Weigl is a partner in the Trusts, Wills, Estates and Charities group at Fasken, a leading international law firm with over 650 lawyers and 9 offices worldwide that offers comprehensive estate planning, estate administration, personal tax planning, charitable giving and estate litigation services. Email: cweigl@fasken.com

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