Oklahoma Power of Attorney: Part Two
We previously did a blog on Powers of Attorney, very specifically, the new power of attorney created when Oklahoma adopted the Uniform Power of Attorney Act. If you would like more specific information regarding this power of attorney, please click here to read more.
Power of Attorney Documents
In our previous post, we discussed the act, the powers, and the impact on previous forms of the document. When giving someone power of attorney, you are giving them a significant amount of authority to act on your behalf. Oftentimes, people wonder if they want to give people these authorities immediately or if they would rather wait for someone to be given these authorities. Good news! Regardless of your preference, you can execute the documents now “just in case” and delineate whether the powers are effective immediately or upon your inability to manage your affairs. This can be done with a section called a “Springing Clause”. Years ago, I, Tom Sullivent, attended a seminar titled The Most Dangerous Document in America, and it concerned the Power of Attorney. At the seminar, they had professors and attorneys discussing this document and it seemed to be the consensus that a Springing Clause was really the best course of action to prevent abuses through the power of attorney. Following that seminar, for many years, virtually every Power of Attorney I drafted had a Springing Clause, meaning, the Power of Attorney would not take effect until the person was unable to manage their own affairs. However, I began seeing instances, time and time again, in which the springing clause prolonged the ability of the person listed as an individual being able to get something done on behalf of the signor because they had to get the signor to a doctor and get a letter from 2 physicians indicating they could not handle their own affairs, thereby authorizing them to activate the power of attorney to do whatever it was they needed to do.
Real-World Examples
Now a real-world example to explain. Say for instance a person who is listed as the power of attorney for their mother realizes she had a lake house in her individual name and failed to place the lake house into her trust nor did she name a beneficiary on the deed to the lake house. The mother now has severe dementia and is unable to leave the facility caring for her. The child then contacts an attorney to help, and the attorney then tells them to send over their power of attorney. The attorney will then take a look at it and hopefully can prepare the appropriate documents and the power of attorney can come in and sign it on behalf of their mother. However, when the attorney reviews the Power of Attorney, they discover it has a Springing Clause and they quickly advise the power of attorney they will need to get letters from 2 doctors indicating that their mother can no longer handle her own affairs. This is what will allow them to utilize the Power of attorney. however, during this time and this delay, the mother passes away and the Power of Attorney is ineffective due to the fact they are only valid while someone is alive. Unfortunately, as a result of the property being in her own individual name with no beneficiary listed nor placed in trust, the property will be subjected to probate. Probates are time-consuming, expensive, and unnecessary with just a little bit of paperwork. Accordingly, while having the Springing Clause in effect does offer much more security to the person signing it—they know that no one is going to do something behind their back using the power of attorney because it only becomes effective if they are disabled or incompetent—it does cause a slowdown in the event someone needs to utilize it. So, generally, there is not necessarily a right or wrong answer but it is something to be considered when creating the power of attorney. The question here is – do they want the springing clause or do they not?
Many factors must be considered here, age, relationships, desires, and more.
If you have questions, please feel free to contact us.
