Financial Counseling Certification Program (FiCEP) Practice Exam

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What is the best description of a springing (conditional) Power of Attorney (POA)?

A POA that is active immediately
A POA that activates only under specific conditions
A POA that is used only for selling property
A temporary POA that lasts for 90 days

The correct answer is: A POA that activates only under specific conditions

A springing or conditional Power of Attorney (POA) is characterized by its activation only when certain predefined conditions are met. This means that the individual granting the POA retains control of their affairs until a specific event or circumstance occurs, such as incapacitation or illness. This mechanism is designed to provide protection and ensure that the agent can only act on behalf of the principal when it is necessary or appropriate. In contrast to the option that states a POA that is active immediately, a springing POA does not grant immediate power; instead, it defers authority until activation conditions are satisfied. Additionally, while some POAs may have limitations regarding property transactions, the springing POA is not exclusively for selling property. Lastly, the idea of a temporary POA lasting for 90 days does not align with the definition of a springing POA, which is specifically conditional rather than time-limited.