Financial Power Of Attorney
It is never too early to prepare for the future. A financial power of attorney, or more specifically, a durable financial power of attorney, is a document that you put in place now in the event of your incapacity. That is, your inability to handle your own affairs such as running a business or managing your household finances. Incapacity can arise from a number of different causes. Sudden illness, injury, an accident, and advanced age can all lead to incapacity. Creating a durable power of attorney for finances allows you to designate someone now who can help you with your finances should you become unable to do so in the future.
A power of attorney is one of many ways to create a strong legal foundation to protect yourself and your family. To be an effective estate planning tool, however, your durable financial power of attorney must be signed while you are well. Once you lose capacity it is too late.
What Is A Financial Power Of Attorney
A durable financial power of attorney is a legal document where an adult designates someone as their agent to make financial decisions on their behalf. They are sometimes referred to as a “POA” or a “DPOA.” Generally, a financial power of attorney will allow a loved to help you:
Manage Your Assets
Sign Your Checks
Pay Your Bills
Sell Your Property
Make Deposits and Withdrawals
Manage Insurance Policies
Help With Taxes
Help With Government Benefits
Help With investments
Your power of attorney plays a vital role in your estate plan. Life is unpredictable and you do not know if you will ever be put into a position where you will not be able to make these decisions. Without a power of attorney in place, your family may be unable to assist you with these important tasks. Perhaps worse, they may be forced to pursue a guardianship or conservatorship.
What Makes A Power Of Attorney Durable?
A non-durable financial power of attorney would terminate upon your incapacity—the time when you likely need it the most! Making a power of attorney “durable” simply means the document will remain in full force even though you are incapacitated. Allowing your family to assist you with your finances. This is done by adding language to the document which extends the authority of your appointed agent beyond your incapacity. In an estate planning context, nearly all financial powers of attorney are durable.
General Vs Limited Power Of Attorney
A power of attorney may be general or limited. A general financial power of attorney allows your agent to do almost anything on your behalf that you could legally do yourself. Under a limited power of attorney, your agent is limited to those specific acts or transactions which you designate.
Requirements Of A Michigan Power Of Attorney
In Michigan, state law requires a durable power of attorney to be dated and signed voluntarily by the principal or signed by a notary public on the principal’s behalf. Further, the durable power of attorney must be either signed in the presence of two witnesses, neither of whom is the attorney-in-fact, and both of whom also sign the durable power of attorney, or acknowledged by the principal before a notary public. In addition, the appointed agent must execute an acknowledgment of his or her responsibilities before exercising authority under a durable power of attorney.
When Does A Financial Power Of Attorney End Or Expire?
A durable power of attorney may terminate a number of ways. First, you may revoke your power of attorney. If the power of attorney is revoked your agent loses his or her authority to act on your behalf. Second, the power of attorney may terminate on its own. In some situations an estate planning attorney may draft a power of attorney to terminate after a period of time or upon the occurrence of a specific event. If this is the case, then the power of attorney will terminate at the specified time or event. Third, a power of attorney may be revoked by the court in situations where the agent is abusing a power of attorney. In addition, a power of attorney terminates on the death of the principal. The list above is not exhaustive, but it does cover the most common ways a power of attorney is revoked.
What Is A Springing Power Of Attorney
A durable power of attorney grants your agent the authority to make decisions on your behalf the moment it is executed. This is not always ideal and can cause issues. The springing power of attorney has been developed to deal with those issues. Under a springing power of attorney, your agent does not have authority to act on your behalf until a specified event occurs. Typically, when you become incapacitated. Your incapacity is usually determined by a court or a physician. As such, your agent has no authority to act until you are determined to be incapacitated.
Do I Need A Durable Power Of Attorney
A financial power of attorney is a critical part of your estate plan. Without it, your family may be unable to assist you with your financial affairs. Leaving you vulnerable. Perhaps worse, they may be forced to pursue a guardianship or conservatorship. A financial power of attorney is a simple and effective way to insure you are protected should you become incapacitated. Durable powers of attorney are typically provided as part of a comprehensive estate plan along with other documents such as a revocable trust, living will, medical power of attorney, last will and testament, and more.
Financial Power Of Attorney Forms
There are various free power of attorney forms available online or for purchase at your local office supply store. Be extremely cautious when using these forms as they are typically not state specific. Therefore, they may not be ideal for Michigan residents. Moreover, they often do not contain critical provisions which can leave your agent unable to assist you with important tasks.
Michigan Power Of Attorney
Would you like to learn more about financial powers of attorney? At Atlas Law, PLC, we can help you create a financial power of attorney tailored to your specific needs! Our law firm serves all of Michigan, Novi, Northville, Plymouth, Canton, Salem Livonia, Farmington, Farmington Hills, West Bloomfield and more. If you have a question about powers of attorney or need assistance with your estate plan call us now.
We offer free consultations. Call today (248) 773-5555