Incapacitation: When Does a Power of Attorney Activate?

Your mother named you as her agent in her power of attorney (POA). Now, your mom is suffering from an incapacitating health condition, leaving her unable to pay bills and make decisions related to her finances. What’s the first step to help?

The fact that your mom has a power of attorney is already a great start, otherwise, you would need to have a judge appoint you as her guardian, which could cause delays and unnecessary expenses.

In New Jersey, the process of activating a power of attorney due to the principal’s incapacity depends on the type of POA the principal executed. Here are the most common POAs available in New Jersey and what the agent must do to be able to step in as the principal’s agent under each:

Durable Power of Attorney: With a scope that can be flexible, a durable power of attorney takes effect as soon as the principal signs it and terminates upon the principal’s death or if he or she revokes it. With a durable power of attorney, the agent can immediately tend to the principal’s financial matters. It should be noted that, even while the POA is effective immediately, the principal usually doesn’t intend for it to be used unless he or she actually becomes incapacitated.

Springing Power of Attorney: A springing power of attorney takes effect only upon the principal’s incapacitation. For a springing power of attorney to be activated, at least one medical professional, usually a licensed physician, will need to certify that the principal is incapacitated before the POA can be used by the agent.

Once the agent steps in under a power of attorney, he or she should immediately begin communicating with the principal’s financial institutions who will all need copies of the POA and any signed certifications and affidavits required.

It’s important to note that the specific requirements and procedures can vary depending on the laws of the jurisdiction and the language used in the POA document. To ensure compliance and proper execution, it’s recommended that the agent seeks legal advice or assistance when dealing with activating a power of attorney due to the principal’s incapacity.

RELATED READ: In our Rumor v. Reality blog series, we addressed the incorrect rumor: “Spouses have the automatic right to access the other spouse’s accounts, so my spouse and I don’t need a power of attorney.”

Advanced Medical Directive (AMD): An AMD is like a healthcare power of attorney in that it allows the principal to name an agent to make medical decisions when the person is unable to do so. Once the agent has the authority to make medical decisions on behalf of the principal, he or she will gather all the relevant information about the principal’s condition, consult with his or her doctors and make decisions that align with the person’s interests. Without an AMD, medical providers will turn to next of kin to make decisions. This can cause problems if they don’t agree on a course of action and can lead to protracted and costly legal battles.

Timothy Rice Estate & Elder Law Firm has decades of experience helping execute powers of attorney and providing guidance to agents once a POA needs to be activated due to a loved one’s incapacitation. Please call us if you have any questions about the POA process or need assistance in executing or activating one.

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