A power of attorney, now referred to as a durable power of attorney, is an important document in your estate plan. This document nominates an individual who will function as your fiduciary and agent, managing your financial affairs in the event of an incapacity.
This document, when properly executed, will allow your fiduciary to conduct all of your financial, household, and even business affairs. The person appointed to serve as your power of attorney therefore must be a trusted individual; a fiduciary who will keep your interests in mind and carry out your intentions.
Unlike most other estate planning documents that provide for the transfer of property, wealth, and estate, upon one’s death, the durable power of attorney takes effect during your life. While the powers of an attorney-in-fact are broad, there are three things the POA cannot do on behalf of the principal:
- create an estate plan;
- represent the principal in court; and
- divorce the principal’s spouse in a family court.
Michigan follows the Uniform Probate Code, and has statutorily defined a durable power of attorney:
A durable power of attorney is a power of attorney by which a principal designates another as the principal’s attorney in fact in a writing that contains the words, “This power of attorney is not affected by the principal’s subsequent disability or incapacity, or by the lapse of time”, or “This power of attorney is effective upon the disability or incapacity of the principal”, or similar words showing the principal’s intent that the authority conferred is exercisable notwithstanding the principal’s subsequent disability or incapacity and, unless the power states a termination time, notwithstanding the lapse of time since the execution of the instrument.
The DPOA is a standard must-have document in any useful estate plan. If you need to review your existing estate plan, or need to develop and execute an estate plan that conforms to your current needs and goals, contact our law firm for a free consultation.