What if you're uncomfortable handing over all rights to a child now under a power of attorney while you are still capable of managing your own affairs. Is a springing power of attorney the answer? A springing power is a power of attorney that only becomes effective if you (the grantor or person signing the power) become disabled. This approach addresses the exact concern raised. You don't provide powers to your kid as agent until you really need the help, i.e. when you cannot handle matters on your own. While this sounds seductively good and simple, as the saying goes, the devil is in the details. If you cannot trust your kid while you're alive, well and astute to keep an eye on the kid, why and how can you trust the kid to do right when you're disabled? The entire concept of a springing power is often questionable. How do you define disabled such that the power of attorney "springs" into effect? Not such a simple definition. If you have a temporary illness is that sufficient? What is? What if you recover? How do you get the financial reins back from junior? All these issues can be dealt with but they add complexity. Don't forget HIPAA. This law imposes strict limitations on the disclosure of medical information. To prove disability you need to address these requirements. Once you get through all that your kid will have to convince the bank or other person to accept the power, not always so simple. So a springing power can address a common parental worry, but it creates a host of issues. A power effective immediately might mitigate some of the concerns. A funded revocable living trust can provide an even more comprehensive alternative. The bottom line is, even a power of attorney, which too many people dismiss as "simple" and "standard" is fraught with issues that you can only ignore at your own peril.
FLP/LLC Funding: Some courts have looked askance at FLPs and LLCs that delay funding after formation, or whose partners/members leave time lags between each making contributions. These delays happen regularly in the non-family world in deals with real independent parties. Consider including in the partnership or operating agreement a clause giving the GP or manager the right to make any equitable adjustment to address the problem.
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