A power of attorney is a legal document that allows you to authorize someone you trust to act on your behalf in financial and legal matters. In Michigan, having a properly drafted power of attorney can help ensure your affairs continue to be managed if you become unable to handle them yourself.
Many people assume powers of attorney are only for older adults, but they can benefit anyone. An accident, illness, military deployment, extended travel, or another unexpected event could leave you temporarily or permanently unable to make important financial decisions. Creating a power of attorney before that happens gives you greater control over who will act for you and what authority they will have.
What Is a Power of Attorney?
A power of attorney (POA) is a written legal document that gives another person, known as your agent or attorney-in-fact, authority to act on your behalf. The authority you grant can be broad or limited, depending on your needs and goals.
A Michigan financial power of attorney may allow your agent to:
Pay bills and manage bank accounts
Handle real estate transactions
Manage investments and retirement accounts
Sign contracts and legal documents
File tax returns and communicate with financial institutions
Your agent has a legal duty to act in your best interests and follow the instructions outlined in the document.
When Does a Michigan Power of Attorney Take Effect?
A power of attorney can take effect as soon as you sign it or only after a specific event occurs, depending on how it is drafted.
Some people want their chosen agent to have immediate authority to assist with financial matters. Others prefer the document to become effective only if they become incapacitated. The right approach depends on your circumstances, the person you choose as your agent, and your overall estate planning goals.
We can help you determine which option makes the most sense for your situation.
Who Should You Choose as Your Agent?
Choosing an agent is one of the most important decisions you will make when creating a power of attorney.
Your agent should be someone who is:
Trustworthy and responsible
Organized and capable of handling financial matters
Willing to serve in the role
Able to follow your instructions and act in your best interests
Many people name a spouse, adult child, sibling, or close friend. You may also name successor agents who can serve if your first choice is unable or unwilling to act.
What Happens If You Do Not Have a Power of Attorney?
Without a valid power of attorney, your family may not automatically have the authority to manage your finances if you become incapacitated.
Instead, a loved one may need to ask a Michigan court to appoint a conservator to handle your financial affairs. That process can take time, involve additional expense, and place important decisions in the hands of the court rather than someone you selected yourself.
Planning ahead often gives you greater flexibility while reducing uncertainty for your family.
How Does a Power of Attorney Fit Into Your Estate Plan?
A financial power of attorney is one part of a comprehensive estate plan. While a will controls the distribution of your property after your death, a power of attorney helps protect you during your lifetime if you cannot manage your own affairs.
Many Michigan estate plans also include:
A will
Patient advocate designation or advance directive documents
Trust planning, when appropriate
Beneficiary designation reviews
When these documents work together, they provide a more complete plan for managing your financial and personal affairs.
Plan Before You Need It
A power of attorney gives you the opportunity to decide who will manage your financial affairs before an emergency occurs. Waiting until you become incapacitated may leave your family with fewer options and require court involvement that could have been avoided.
At Keating Law, PLC, we help individuals and families throughout Michigan prepare powers of attorney that reflect their wishes and coordinate with the rest of their estate plans. If you are ready to put these protections in place or update an existing document, contact us to schedule a consultation.