In estate planning, mechanisms such as wills and trusts can help guide and direct your assets after you pass away. What happens if you become incapacitated due to an accident or illness, and are unable to make or communicate about important decisions while you’re still alive? That’s where incapacity planning comes in.
It is never enjoyable to think about what would happen if you were to sustain a major injury or succumb to an illness. But while it may not be fun, it is necessary to take action while you still have the chance — and help ensure that your affairs will be handled in the way you would want. A power of attorney can empower you to do just that.
What Is a Power of Attorney — and Why Are They So Important?
Black’s Law Dictionary defines a power of attorney, broadly, as:
An instrument authorizing a person to act as the agent or attorney-in-fact of the person granting it.
Powers of attorney are most commonly used to ensure that someone you trust manages your financial and health care decisions when you can no longer do so on your own. A power of attorney that allows your agent to act even if you become incapacitated is known as a durable power of attorney.
This important mechanism is useful for anyone who:
- Wishes to be proactive, and take precautions to make potentially difficult or uncertain situations easier
- Wants to make sure that trustworthy and reliable individuals of their choosing are empowered to handle their financial, health care, and end of life decisions — rather than a court-appointed guardian or conservator
- Wants assurance that their wishes will be followed when they are unable to carry them out for themselves
- Seeks to provide comfort and peace of mind for themselves and their loved ones
- Wants to minimize the risk for disagreements or conflicts among family members
- Wishes to keep their financial, personal, and medical affairs private
- Wants to keep themselves, and their loved ones, out of the complex and costly living probate system
Without a power of attorney, your loved ones’ hands may be tied in a difficult moment. They may not be able to sell property, make business decisions, gain access to funds, or manage investments — making an already tough moment even harder to navigate.
Broadly speaking, if you become incapacitated without a durable power of attorney or a similar mechanism in place, the courts will often be forced to step in and appoint someone to handle your financial and medical decisions — a process known as living probate. This process can be slow, uncomfortable, and expensive. It can also put different family members at odds with one another.
Meanwhile, it’s important to remember that without a power of attorney, you are giving up control over who will ultimately make important decisions on your behalf. Indeed, the court may appoint someone to act as your guardian or conservator that you would not have chosen for yourself. What if a family member you do not trust is appointed to this important role? What if you want different parties executing your medical and financial decisions?
Different Types of Power of Attorney
There are several types of power of attorney documents, each designed to give a chosen agent different levels of control over your medical and/or financial decisions.
Broadly speaking, the three types of power of attorney most frequently used in Michigan estate and incapacity planning include:
- Durable power of attorney for financial matters.This is a legal document that gives the agent of your choice the right to handle your financial affairs if you become incapacitated, including transferring assets into a trust, pursuing claims or actions on your behalf, managing business affairs, selling property, and more.
- Durable power of attorney for health care. This is a legal document that gives someone of your choosing the right to handle your health care decisions if you become incapacitated, including treatments and end-of-life decisions. This person is known as an agent or advocate.
- Durable power of attorney for mental health matters. Similar to a power of attorney for health care, this names an advocate to handle your mental health care decisions if you become incapacitated. A patient advocate is obligated to act in your best interest and take reasonable steps to follow all of your expressed desires, preferences, and instructions relating to your care.
Among these types of powers of attorney, there are other important factors to keep in mind. First and foremost, there is the aforementioned question of whether or not a power of attorney is durable. A “durable” power of attorney is set up in such a way that someone may act on your behalf if you become incapacitated. Some types of power of attorney are set up to be non-durable, meaning that they cease to have an effect if the principal becomes incapacitated.
These tools are most often used in situations in which the principal needs someone to act on their behalf for a specific purpose — for example, if they are traveling and unable to attend an appointment, or if they need to authorize an attorney to sign paperwork for them during a transaction.
Meanwhile, it’s important to consider whether an agent’s powers will be broad, or more restricted. A general power of attorney typically grants the agent broad or extensive decision-making authority, while a limited or special power of attorney narrows their scope — perhaps to specific assets or legal decisions, depending on the circumstances.
The Importance of Talking With an Experienced Legal Professional
Powers of attorney are important tools, which can empower you to safeguard your assets, protect your privacy, and maintain control over pressing financial, health care, and end of life decisions. With that said, they can be complicated, and difficult to understand alone.
Dean can help you navigate this process from beginning to end, from understanding all of your options to nominating an agent to help you when you’re in need. If you currently have a power of attorney and are unsure if your document can be classified as durable, Mr. Patrick can help review your current situation during your consultation initial consultation.
While we all hope we don’t need to use the insurance we pay for, we are glad it’s there when we need it. There are no good excuses for an adult to be without financial and health care power of attorney.
Ready to put some protections in place? We are here for you. Our skilled law firm is here and ready to assist with all of your incapacity planning and probate needs, including powers of attorney.
At the Patrick & Associates, PLLC., we will work hard to accomplish your goals, while handling your matter with professionalism and expertise. Mr. Patrick can help you navigate through all the legalities and formalities, so that you can rest assured that you and your loved ones will be taken care of, whatever life brings. Don’t hesitate to call our Southfield, Michigan office at (833) 469-4897 to set up your initial consultation. You may also click here to get in touch online.
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