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Powers of Attorney: What You Need to Know

Estate Planning Awareness Week 2019

October 23, 2019

At some point you may have signed a power of attorney or perhaps filled out the standard medical power of attorney (sometimes called a “Patient Advocate Designation”) at your doctor’s office. For the sake of this article, we will refer to these collectively as “POA.” These documents are designed to be used when you are unable to act for yourself. In Michigan, powers of attorney tend to fall in two categories: (1) general powers of attorney, or (2) health care powers of attorney or patient advocates. Many times, the people appointed in the documents, known generally as ‘agents’, are referred to as that person’s ‘power of attorney.’ However, the law distinguishes between the two and each have their own legal authority and limitations. All of this begs the questions of whether you know what documents you have in place and will they function as you intend?

 

  • Types of POA: There are various types of powers of attorneys, such as financial, medical, durable, and limited. Do you know what type yours is? You may have completed it and haven’t looked at it since. The type of POA affects how and when it works and how it gets activated.

  • Disability: Does your POA only become active once you have been declared by two physicians incapacitated or disabled? Or was it designed to be effective on execution, the same day you signed it? This can make a huge difference in the crucial moments of an emergency; it is important to know which type yours is.

  • Acknowledgment: Have your attorney(s)-in-fact signed an acknowledgment of the attorney-in-fact’s responsibilities? These written acknowledgments must contain specific statements and are now required under Michigan law before your agent can act on your behalf.

  • Limits on Authority: Does your POA limit the power of the attorney-in-fact? Or does it grant broad powers? Does it apply to business-related functions or just personal?

  • Timing: How long ago was the POA executed? It may be on file at your doctor or hospital, but does that facility still consider it current and valid? Some facilities may require POAs to be updated after a certain amount of years. Michigan laws regarding powers of attorneys were revised in 2012 and the law changes regularly, so the older the POA, the more likely your attorney-in-fact will have difficulty using it when the need arises.

  • Capacity: Anyone looking to establish a POA must be mentally fit to appoint someone as his or her agent, to serve as your attorney-in-fact, or your patient advocate. Encourage your loved ones to have these kinds of documents taken care of while they are still healthy enough to understand how they work and what authority they are granting to an agent acting on their behalf. Don’t wait until it is too late to execute a POA.

  • Location of your POA: Do you know where your POA is filed? Would your loved ones be able to find it in the event of an emergency?
    End of Authority: It is important to understand that POAs do not extend beyond the life of the person who created it. In other words, the POA dies when the principal dies. They only work during your lifetime, and once you pass away, the POA document becomes null and void.

    • Note: The only documents that extend beyond your death are your will and trust. It is important to speak to an estate planning attorney to make sure your estate is set up to benefit you and your family both during your lifetime and after.


Smith Haughey is ready to help you designate a power of attorney and answer any questions you might have regarding a current designation.


Download the PDF here.

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