Get The Durable Powers Of Attorney That You Need
Closely related to estate planning, powers of attorney are useful for many people during their lifetimes. These documents allow a person (the principal) to give someone else the ability and responsibility to manage financial and business matters on their behalf. Depending on how the documents are written, these powers may be blanket powers (perhaps between spouses, available anytime) or they may be triggered by certain conditions, such as the incapacitation of the principal.
At Reed Law, PLC, our attorneys explain the parameters of rights that can be built into durable powers of attorney and help clients customize them accordingly.
How Durable Powers Of Attorney Work
As mentioned above, the person who creates a durable power of attorney is legally termed the principal, and the person they designate to act on their behalf is known as the attorney-in-fact. Laws in Michigan include detailed, specific rules about:
- The attorney-in-fact’s fiduciary duties and the standards of care that apply
- The requirements of the original signing of a durable power of attorney
- The authority, rights, responsibilities and limitations of the attorney-in-fact’s actions
- The importance of following instructions found in the durable power of attorney
- The need for the attorney-in-fact to keep records of transactions, receipts, disbursements, and investments
- The need for the attorney-in-fact to give an accounting to the principal (or the principal’s guardian or conservator) of actions taken per the power of attorney
- The attorney-in-fact’s potential liability in case of losses of the principal’s assets due to a breach of fiduciary duty
A power of attorney should state how long it will last — perhaps one of the following:
- For a certain length of time
- As long as the principal’s disability or incapacity lasts
Unless the attorney-in-fact is explicitly authorized to do so, they are not to:
- Give gifts from the principal’s assets
- Set up unauthorized joint checking accounts between the principal and the attorney-in-fact
Another type of power of attorney is an advance directive or health care power of attorney. This document gives a proxy the legal authorization to make decisions on someone’s behalf under certain circumstances, usually a medical crisis. A living will may also help a patient advocate (who may be the same person or someone else) to understand and communicate patients’ wishes when they cannot speak for themselves.
Who Will Be Your Agent Or Attorney-In Fact?
When you create a durable power of attorney or a health care power of attorney, you should discuss the implications with the person you select to fill this role as needed.
If you work with our lawyers at Reed Law, PLC, we will help you understand the challenges and opportunities that durable powers of attorney offer.
We will advise you on how to decide whom you will name as your contingent agent or attorney-in-fact. It might be your business partner or another trusted person in your life, such as a long-time family friend.
Common Questions About Durable Powers Of Attorney
Bring us your concerns such as those discussed below, and we will personalize answers for you. The important thing is to begin the dialogue with an attorney who will advise you according to your priorities.
What are some common examples of real-life situations that ideally call for durable powers of attorney?
You may be in a coma after a car accident. Because of your incapacity issues, someone close to you will need access to your bank account to pay your mortgage, car payments and other bills. A durable power of attorney can meet that need.
Your spouse may be kidnapped, incarcerated or trapped overseas without ready access to digital communications allowing them to participate in business decisions. With a durable power of attorney in place, you will have the ability to conduct transactions on your spouse’s behalf.
What if no one in your family or close circle of friends is a suitable agent or attorney-in-fact?
You may opt to get an attorney, a law firm or a private individual who provides professional guardian and conservator services to do the honors if they are needed.
How will you prevent wrongdoing by your selected attorney-in-fact?
The laws of Michigan have provisions for safeguarding against the misuse of powers by an attorney-in-fact. At Reed Law, PLC, we can advise you on practical ways to prevent breach of fiduciary duty by your chosen agent.
Take The Necessary Steps To Establish A Durable Power Of Attorney
Our asset protection and estate planning lawyers are ready to guide you in the creation of the powers of attorney that will meet your needs.