If an illness or an accident leaves you incapacitated and unable to express your wishes regarding your medical care or financial affairs, are you prepared? A Bloomfield Hills estate planning lawyer can prepare a durable power-of-attorney to help you deal with such circumstances.
What is a power of attorney? What can it accomplish? A power of attorney is a legal document that gives a person – selected by you – the legal right to act on your behalf. A “durable” power of attorney is a power of attorney document that stays in effect if you become incapacitated.
With a durable power of attorney, if you become incapacitated, the person you have designated – your “agent” – will immediately have the legal ability to pay your bills, manage your investments and other financial affairs, or even give instructions to your medical providers.
What Power of Attorney Documents Do You Need?
A durable power of attorney can give your agent a general power to make decisions for you, or it can give that agent only limited responsibilities. It is up to you how much power your agent will have to make choices on your behalf.
If you reside in Michigan, you should have your attorney prepare two power of attorney documents, or else have your attorney prepare a single document that includes both of these:
- a financial power of attorney, which allows your agent to handle your business and financial affairs on your behalf
- a health care power of attorney, which allows your agent to make medical choices for you if you can’t. (Under Michigan law, a health care power of attorney is called a “patient advocate designation.”)
What Steps Should You Take Immediately?
Anyone in Michigan who is 18 or older should establish a durable power of attorney with the guidance and advice of a Bloomfield Hills estate planning attorney. It’s important, because anyone could be abruptly and unexpectedly disabled or incapacitated.
While we can’t know what tomorrow will bring, we can prepare for it, and the time to prepare is now. Ask a Bloomfield Hills estate planning lawyer to prepare your durable power of attorney or to include your durable power of attorney as part of your comprehensive estate plan.
Why is it important to have durable power of attorney documents prepared now? Consider these five reasons:
Reason #1: You Choose the Person Who Will Make Decisions for You
A durable power of attorney lets you determine who will be making decisions for you if you can’t make those decisions yourself. If you become incapacitated, the agent you have named will make medical and/or financial decisions on your behalf.
If you do not prepare a durable power of attorney document and name someone you trust as your agent, a complete stranger – a judge – could make those decisions, or a conservatorship or guardianship may have to be established for you.
Reason #2: You Avoid the Need for a Conservatorship or a Guardianship
If you become incapacitated without a durable power of attorney, your loved ones may have to petition the court to appoint a conservator and/or a guardian. It’s a costly legal process, and if you are incapacitated, you will have no say about who is named as your guardian or conservator.
Reason #3: A Power of Attorney Document Makes Your Intentions Clear
You don’t want your loved ones battling in court over your intentions if you become incapacitated. A clearly written durable power of attorney document eliminates any arguments or disagreements regarding your wishes.
Reason #4: A Durable Power of Attorney is Proof That Your Agent Represents You
If you are incapacitated, your loved ones may have difficulty making health care arrangements or dealing with your bank or insurance company.
To protect you, most businesses need to see a durable power of attorney document before they will provide your personal information to – or do business with – someone who claims to represent you.
With a durable power of attorney document, your agent can promptly begin taking care of your financial affairs or health care needs.
Reason #5: Your Agent Has Immediate Access to Your Resources
A durable power of attorney gives your agent immediate access to critical assets such as bank accounts, digital assets, or your safety deposit box. Without a durable power of attorney, your family members may have to ask a court for approval before they can have access to your assets.
Depending on your durable power of attorney’s specific language and terms, your agent may have full access to your business affairs, your financial accounts, and your personal property.
Who Should You Choose as Your Agent?
Before you prepare a durable power of attorney, select someone you trust to serve as your agent, manage your financial affairs, and make your medical choices when and if you can’t. It should be someone you would trust with your life, because that is exactly what you will be doing.
Select someone who is committed to protecting your interests, knowledgeable about finances, and good with figures and details. Your agent should be someone who has no difficulty working with lawyers, bankers, and medical professionals.
Have a discussion with the person you select about your power of attorney and about an agent’s responsibilities. It is also important to name a successor agent in case the first person you have selected declines, is no longer qualified, becomes incapacitated, can’t be located, or passes away.
What Else Should You Know About Durable Powers of Attorney?
Under Michigan law, you must sign a durable power of attorney document in the presence of either two witnesses or a notary public. While signing before two witnesses satisfies the legal requirement, some financial institutions will require notarization, so that’s the better choice.
Store your original durable power of attorney document safely and securely, but in a place where your loved ones can easily find it. Make copies for your agent, your successor agent, and any financial institutions or health care providers that you do business with on a regular basis.
Do You Need a Comprehensive Estate Plan?
If your loved ones count on you, preparing an estate plan that includes a durable power of attorney ensures that your loved ones will be secure if you become incapacitated and after you pass away. Speak to your attorney about establishing a comprehensive estate plan.
A comprehensive estate plan can protect your loved ones – and your assets and properties – from the probate process. It can also, in many cases, protect you from certain kinds of liability, reduce your tax burden, and provide financial security for your family members for many years to come.
You can learn more about durable powers of attorney and the other estate planning documents you may need, or you can begin preparing your durable power of attorney immediately – and before your loved ones need it – by contacting Aaron Kendal at Kendal Law Group, a Bloomfield Hills estate planning attorney.