In Michigan there are financial powers of attorney and medical powers of attorney.
These powers (for someone to legally "act" on your behalf), can be granted to people whom you trust to care for you and make important decisions if you are ever not able to manage your own affairs.
Legal authority to act on your behalf can be "present" or "dormant." If presently active, your agent will have immediate legal authority to act on your behalf. Under a dormant power of attorney, your agent will have powers on an "as-needed" basis when doctors have concluded you are not well enough to manage your own affairs.
While it is common to have your oldest adult child act as the designated agent after your spouse, separating financial and medical powers of attorney allow you to have different family members participate in your estate plan within their strengths. For example, an "organized" and "trustworthy" person would be a good candidate for financial powers, and a family member who works in the medical field might be better suited for speaking with doctors as your agent for healthcare issues.
If you could speak to someone who has acted as someone's agent under a power of attorney, they'd tell you how it was an amazing and powerful legal tool that allowed them to provide care and manage the affairs of their parent or other family member.
However, be careful who you ask. When Powers of Attorney are not integrated with a comprehensive estate plan that would document a parent's wishes, and determine how assets should be distributed, the perception of an "abused" Power of Attorney by other family members could lead to deeply rooted and permanent family feuding.
Power to Destroy a Family
Imagine if one day without warning, your brother moved into your Mom's home, started using Mom's cars, and started living off of mom's bank accounts. Then when Mom passed away some years later ... there was nothing left in those accounts for you and your other siblings to share from Mom's estate. And by the way, before Mom died, your brother changed the title of Mom's home to his name and now he owns it.
If you're like most people, you might feel like you were kept in the dark, a little upset, or even cheated. These feelings are what happens when there is only a Power of Attorney, and the POA is not part of a comprehensive estate plan that lays out the rules your family should follow someday.
A comprehensive estate plan documents a parent's wishes, creates a hierarchy of "who's in charge" so there are no conflicts, and plans for an orderly and calculated distribution of assets. Proper estate planning can also maximize the value of what's left to be inherited.
Powers of Attorney Expire
The last thing you need to know about about powers of attorney, are that they expire when you die. If your Power of Attorney was not part of a comprehensive plan, your children will have to go through "probate" in order to inherit any assets you owned at death.
At Family Wills and Trusts PLC, we’ll make sure there are no gaps in your estate plan that would leave your family exposed to unnecessary financial waste, headaches, or the stresses of probate. Request free information or schedule an appointment below to see how you can benefit from working with us.
