April 19, 2022
Immediate Financial Power of Attorney versus Springing Financial Power of Attorney in Estate Plans
Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm www.wisdomwebinar.com to register or give our office a call at 844-885-4200. Castle Wealth Group and Christopher Berry help families with estate planning, elder law, retirement planning, and tax planning from their offices in Brighton, Ann Arbor, Livonia, Bloomfield Hills, and Novi. Certified Elder Law Attorney, Christopher J. Berry, Esq. reviews the differences between Immediate Financial Powers of Attorney and Springing Financial Powers of Attorney as well as the pros versus cons. To learn more visit www.michiganestateplanning.com or call our firm at 844-885-4200. Visit our websites to learn more https://michiganestateplanning.com/ https://www.castlewealthlegal.com/home Episode Transcript: This is Chris Berry with Castle Wealth Group. And today we’re going to talk about the difference between an immediate financial power of attorney versus a springing financial power attorney so a lot of times in our office we do what’s called an immediate financial power of attorney meaning it’s a document that appoints someone to make financial decisions as soon as the document is signed versus what’s called a springing financial power of attorney. A springing financial power of attorney doesn’t become effective until some type of event meaning it springs into existence based after some type of event and quite often that event is maybe two licensed physicians signing off to say that someone’s incapacitated now we don’t really do a lot of springing financial powers of attorney for a couple reasons first a lot of times for that power of attorney to become effective we need multiple physicians to sign off to say that someone’s incapacitated and wrangling up some doctors to get some things when you need to get some things done at the bank can be problematic second. It can be demeaning to an individual to be deemed incapacitated by multiple physicians third sometimes we go from a period of or typically we’re not going from healthy to completely incapacitated there may be some gray area where we might want family members to step in and help us with the bills or help us pay for things without having to jump through hoops or be deemed incapacitated so that’s why a lot of times we do an immediate financial power of attorney that immediately appoints someone to be able to handle your financial affairs now that can sound a little scary but understand they owe you a fiduciary duty they have to act in your best behalf and also it may be a situation where you have put together the power of attorney but maybe you don’t even share it with that person yet so there’s different things that can build in those protections because a lot of people are concerned well what if they steal all my money well understand they violated their fiduciary duty and now there could be civil as well as criminal penalties if they were to take advantage of that situation and then also hopefully you’re appointing someone that you trust in that role. Whether it’s a family member or close family friends so a lot of times yes in our office we do immediate financial powers of attorney that immediately gives authority to the person you’ve appointed now there’s one step that they still need to take before they can act and that is accepting their role as financial power of attorney so one thing you could do is you could say you know what i’m going to do this immediate financial power of attorney but i’m not going to yet give over that acceptance page for them to accept their role because as of 2012 when you do a financial power of attorney the person you’ve appointed has to accept their role and sign on to those those fiduciary duties so if there is a little bit of concern or you feel uneasy about turning over that authority to make financial decisions understand that when you sign the power of attorney you’re not turning it over you’re just giving them the authority to act you can still make your own financial decisions and then b understand that they’re not actually serving until they sign that acceptance form so we find in our office that a lot of times the immediate financial power of attorney outweighs the benefits of doing that springing power of attorney. And one of the reasons is that just because because that a lot of times as we age we might want to turn over portions of our financial responsibility and by having that financial power of attorney that’s immediate in effect uh we can go ahead and do that uh often early in my practice we did a lot more of the springing power of attorney and then families would come back into my office and say you know what uh but three years down the line it’s to the point where maybe mom wants help with the checking but because it’s a springing power of attorney we need to do a new power of attorney saying yeah the kids can help out but mom still has authority to write her own checks so hopefully that’s been helpful understanding the difference in pros and cons versus the immediate versus springing financial power of attorney as a general rule i recommend doing the immediate financial power of attorney so hopefully this has been helpful this is chris berry with castle wealth group talking about the differences between immediate versus springing financial powers of attorney.
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Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm www.wisdomwebinar.com to register or give our office a call at 844-885-4200.