I'm frequently asked to clarify the various terms that describe Powers of Attorney. It's easy for lawyers and legal assistants who talk to clients to forget that the clients might not have a full understanding of the legal terms we toss about. And it's important that clients do understand them, as they use Powers of Attorney every day without a lawyer present.
First of all, the word "Enduring", "Continuing" or "Durable" (depending on where you live) identifies a Power of Attorney that was made by someone who was mentally healthy on the day the document was signed, to be prepared in advance for the day when he or she might lose mental capacity. In law, this is an essential term that distinguishes the planning document from regular business Powers of Attorney that become void once a person loses mental capacity.
It is called "Enduring" or "Continuing" because it is not voided by mental incapacity, but endures or continues through that. Note that it does not endure through the death of the person who signed it.
Also note that a person must have mental capacity to understand the document and its effects in order to sign one. If a person has already lost capacity and needs someone to look after financial affairs, he or she may need the court to appoint someone as trustee.
Once it's established that a Power of Attorney is Enduring/Continuing, there are two kinds available. The difference between them relates to when and how the document is put into use.
An "immediate" Enduring Power of Attorney comes into effect as soon as it is signed. This kind is relatively rare, but is useful in certain circumstances. For example, a person who is beginning to experience confusion and memory loss, or who simply wants help with the banking, may sign one of these.
A "springing" Enduring Power of Attorney comes into effect at a later date, that date being whenever the person who signed it loses mental capacity. In that way, it's similar to a Will, which is signed now but not used until the testator dies. A springing Enduring Power of Attorney "springs" into effect when it is triggered by proof of mental incapacity. This is by far the most popular type of Enduring Power of Attorney.
Are there other legal terms you'd like to see clarified? Let me know.
First of all, the word "Enduring", "Continuing" or "Durable" (depending on where you live) identifies a Power of Attorney that was made by someone who was mentally healthy on the day the document was signed, to be prepared in advance for the day when he or she might lose mental capacity. In law, this is an essential term that distinguishes the planning document from regular business Powers of Attorney that become void once a person loses mental capacity.
It is called "Enduring" or "Continuing" because it is not voided by mental incapacity, but endures or continues through that. Note that it does not endure through the death of the person who signed it.
Also note that a person must have mental capacity to understand the document and its effects in order to sign one. If a person has already lost capacity and needs someone to look after financial affairs, he or she may need the court to appoint someone as trustee.
Once it's established that a Power of Attorney is Enduring/Continuing, there are two kinds available. The difference between them relates to when and how the document is put into use.
An "immediate" Enduring Power of Attorney comes into effect as soon as it is signed. This kind is relatively rare, but is useful in certain circumstances. For example, a person who is beginning to experience confusion and memory loss, or who simply wants help with the banking, may sign one of these.
A "springing" Enduring Power of Attorney comes into effect at a later date, that date being whenever the person who signed it loses mental capacity. In that way, it's similar to a Will, which is signed now but not used until the testator dies. A springing Enduring Power of Attorney "springs" into effect when it is triggered by proof of mental incapacity. This is by far the most popular type of Enduring Power of Attorney.
Are there other legal terms you'd like to see clarified? Let me know.
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