Michigan Durable Power of Attorney
A successful estate plan must include a power of attorney (POA) to manage assets. A general power of attorney is created to allow for the successful management of the POA creator's finances and other life events when the creator becomes incapacitated or otherwise as defined in the POA. The alternative is to request a court order from the probate court as either a guardian or conservator on behalf of an incapacitated person. Third parties, including care providers, banks, etc. will not transact with an incapacitated business, including transferring assets, making payments, etc. without a court order or valid power of attorney.
It is therefore important to have a power of attorney in force before incapacitation to avoid delays and conflicts when the incapacitated person needs immediate help.
What is a Durable Power of Attorney?
A durable power of attorney grants someone you appoint the power to act on your behalf for specifically defined activities. This document may also be referred to as a general power of attorney, power of attorney, financial power of attorney, etc. It is not typically referred to as a medical power of attorney, which is a separate document. For example, a durable power of attorney can be used to manage a business, finances, a household, and make other decisions for you. It is extremely important to understand the purpose of the power of attorney to make sure you grant someone an appropriate amount of authority to act on your behalf. The person holding the POA takes actions that are legally binding on you. For example, if the POA can enter into contracts on your behalf, then those contracts are binding on you.
Do You Need a Durable Power of Attorney?
Having a well thought out durable power of attorney is a good idea and a key part of any estate plan. No matter what your age is, you could lose your ability to make important decisions for yourself. This could impact your life, your family or your business. You could lose capacity due to a car accident or other injury, as well as the impact of growing older on your mental or physical abilities. Failing to plan ahead of time could result in your family needing to petition the probate court for a conservatorship or guardianship, which is time consuming, expensive, and may create family tensions over the best course of action or who should make decisions. It is best to avoid this.
When is a Power of Attorney In Force?
A power of attorney may be either springing or non-springing. For most people, a non-springing power of attorney is the right choice. Most people want to make their own decisions and do not need or want the assistance of others. When someone becomes incapacitated, then they need a trusted person to make decisions on their behalf. It also may be advisable to provide a POA to a trusted person as you get older so that if there is a general decline, the trusted person can step in and act without the need to go to the courts. It may be necessary then to start with a spring POA, and then later revise the POA to provide general powers to avoid problems with continuing care and decision making.
Contact Michigan Estate Planning Attorney Andrew Steiger
If you need assistance with a Michigan estate plan that includes trust planning, contact Michigan estate planning attorney Andrew Steiger for more information.