Every Michigan resident, regardless of income, should create an estate plan with the assistance of an experienced Michigan estate planning attorney. And a complete estate plan often includes what is known as a durable power of attorney. This is a document that details who is permitted to make decisions on an individual's behalf if he or she becomes incapacitated or is otherwise unable to make certain decisions. Some of these decisions may be related to health and medical matters, while others address financial issues. In other words, a durable power of attorney allows one person to handle all or most of another person's legal affairs.
Legal requirement
A durable power of attorney becomes effective when a person, also called a "principal," is no longer competent and isn't able to make certain decisions for him or herself. When drafting the document, the principal can define the type of disability or incapacity that will cause the power of attorney to become effective. The individual who is given the authority to act on behalf of the principal is called the "agent." Typical duties of an agent include paying bills, signing checks, making deposits, entering into healthcare agreements, entering into contracts for professional services, selling real estate and other types of property, purchasing insurance, and handling other business. However, a power of attorney can also restrict an agent from performing certain tasks. For example, one agent may be appointed to handle financial matters, while another may be appointed to handle medical issues. In addition, it is important to select a responsible, capable person to act as an agent and to name a successor agent to take over if the original agent is unable or unwilling to perform his or her duties.
Considerations for married couples
Durable powers of attorney can also be helpful for married couples dealing with certain financial matters. For example, while spouses may sign checks and withdraw money from joint bank accounts, they may not unilaterally perform transactions involving jointly owned stock or make certain changes to insurance policies or retirement benefits. In order to conduct these transactions, at least one spouse needs authorization as an agent under a power of attorney.
When to execute a durable power of attorney
An individual must execute a power of attorney before he or she becomes incapacitated. In addition, it must be signed in front of a notary or two witnesses. The agent must also sign an acknowledgment of his or her duties and responsibilities.
Contact our Michigan estate planning attorney today
If you need assistance with estate planning in Michigan, it is imperative that you hire an experienced
Michigan estate planning attorney. A Michigan estate planning attorney can assist you with all aspects of estate planning, including executing a durable power of attorney, gifting assets to grandchildren, drafting a will, choosing an executor, or simply beginning the estate planning process. If you’d like to begin the estate planning process, please contact one of our experienced Michigan attorneys for a consultation.