Future Business Leaders of America (FBLA) Agribusiness Practice Test

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What is a ‘springing power of attorney’?

A document that remains effective until revoked
A power of attorney that takes effect immediately
A legal instrument that activates upon a specified event
A durable power meant for financial decisions

The correct answer is: A legal instrument that activates upon a specified event

A springing power of attorney is a legal instrument that becomes effective only upon the occurrence of a specified event, such as the incapacitation of the principal. This means that the authority granted to the agent does not activate immediately but activates only when certain conditions are met. For example, this type of power of attorney may be designed to take effect when a doctor certifies that the principal is unable to manage their own affairs. This structure provides individuals with more control over when the designated agent can act on their behalf, allowing them to maintain authority over their affairs until they are no longer able to do so. It is particularly useful for individuals who want to ensure that their decisions are made when they cannot make them personally, while still retaining autonomy when they are able.