Planning ahead: Power of attorney – part 1
Don’t put off planning ahead for your future needs – the quality of life, quality of care and health outcomes may depend on it.
There’s an old saying that there are only two sure things in life: Death and taxes. Everyone knows that death is inevitable, but something many people may not realize is that for most individuals, death is not a sudden event; rather there is often a period of time spent prior to death in a state of declining health, either by injury, illness, disability or just old age. There are several terms used when it comes to planning ahead for future personal, financial and health care needs. It’s important to know what these terms mean and which documents are needed to ensure that your needs are met in the event you can no longer make decisions for yourself. This article discusses “power of attorney” and “durable power of attorney” and how each is used. Below is a summary of the two terms.
- Power of attorney – This is a form used to designate a person (the agent) to handle some or all of the business/financial affairs of a person (the principal) if he/she is unavailable. This is a contract between two competent adults. An example of this would be if a principal gave his or her agent power of attorney over finances, while he or she was traveling out of the country. This does not cover if the principal becomes incapacitated or dies.
- Durable power of attorney – The power of attorney document has to have certain language that would include the agent being the authority over the principal’s finances in the event that he or she becomes legally incompetent to be considered durable power of attorney. For example, if the principal has a stroke and is unable to handle his or her finances, the durable power of attorney explains that the agent can act on the behalf of the principal in that circumstance.
How do you get started on having a durable power of attorney? The best way is to contact an attorney that can help draft a power of attorney document that includes your specific needs and desires. They are the experts. You can find attorneys by asking friends, family or your local area agency on aging. If an attorney is out of the budget, there are document forms online or at the local senior center that can be filled in and signed/witnessed. While there is no law that requires establishments to accept these kinds of documents, they are generally accepted and are more likely to be accepted if drafted by an attorney. Also, when drafting the power of attorney, think about choosing someone that you trust; keep in mind this person will have access to your finances. It can, but does not have to be a spouse, partner, child or relative. Consider having a backup or second choice if needed. Other points to consider is what kind of responsibilities the principal will have, whether it is just over banking information or broader responsibilities that cover signing house documents if you are not able. All of these things, including the time-frame of when you want the power of attorney to begin and end need to be spelled out in the document.
Michigan law on power of attorney has changed since 2012, so it is best to review any documents prior to that. Generally, it is best to review these types of documents annually so that they are up to date with your needs and wishes. For more information on this or other future planning documents, contact Elder Law of Michigan or your local Michigan State University Extension office.
For more on this topic read Planning ahead: Advance directives – part 2.