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Understanding the Differences Between a Durable Financial Power of Attorney and a Springing Financial Power of Attorney in New York

In New York, a durable financial power of attorney and a springing financial power of attorney are two different types of legal documents that allow a person to appoint someone else to manage their financial affairs. While both documents can be useful in certain situations, they have some key differences that it is important to understand.

A durable financial power of attorney is a document that becomes effective as soon as it is signed. This means that the person appointed as the attorney-in-fact, or the person given the authority to manage the grantor's financial affairs, can begin acting on the grantor's behalf as soon as the document is signed. A durable financial power of attorney remains in effect until it is revoked by the grantor or until the grantor dies.

A springing financial power of attorney, on the other hand, does not become effective until a specific event or condition occurs. This event or condition is known as the "springing event." For example, the springing event may be the grantor's incapacitation or disability. Once the springing event occurs, the attorney-in-fact can begin acting on the grantor's behalf.

One of the main differences between a durable financial power of attorney and a springing financial power of attorney is when they become effective. A durable financial power of attorney is effective immediately upon signing, while a springing financial power of attorney is effective only when the springing event occurs. It is durable as it survives the principal’s physical and mental incapacity.

There are pros and cons to both types of financial powers of attorney. A durable financial power of attorney can be useful in situations where the grantor needs someone to manage their financial affairs immediately or gives the agent the authority to manage the financial affairs during your incapacities, such as illness or disability. However, because a durable financial power of attorney is effective immediately, it may be more vulnerable to abuse or misuse by the attorney-in-fact.

A springing financial power of attorney, on the other hand, can provide additional protection against abuse or misuse because it only becomes effective when the springing event occurs. This can be especially important for individuals who are concerned about the possibility of their attorney-in-fact taking advantage of their financial affairs. However, because a springing financial power of attorney is not effective until the springing event occurs, it may not be as useful in situations where the grantor needs someone to manage their financial affairs immediately or it could be problematic to determine the incapacity of the individual and by whom and can lend itself to delays just when there is an urgent need to manage the financial matters.   

In summary, a durable financial power of attorney is a document that becomes effective as soon as it is signed and remains in effect until it is revoked or the grantor dies. A springing financial power of attorney, on the other hand, does not become effective until a specific event or condition occurs. Both types of financial powers of attorney can be useful in certain situations, but it is important to carefully consider the pros and cons of each and to work with an experienced attorney to ensure that the appropriate type of financial power of attorney is used. Give us a call @ 516-570-4016 to discuss your needs.