Appointing an "agent" to help when you're incapacitated...
For estate planning purposes, the two types of “Powers of Attorney” referenced in the “Estates and Protected Individuals Code” found at Michigan Compiled Law 700.5501 – 5520, are the documents that typically accompany any estate plan.
Below is MCL 700.5501 which is the Michigan statute that indicates the requirements necessary to create a durable power of attorney for “financial purposes,” and MCL 700.5506 which is the statute that indicates the requirements necessary to create a durable power of attorney for “health purposes.”
No one “needs” a power of attorney for financial matters or health care, but most people will “want” these documents.
Every now and then someone asks if they really “need” a power of attorney for healthcare or a power of the attorney for financial purposes. The answer to this question is typically no. There is no “need” to prepare either of these documents, but there are some really good reasons why they may be “wanted.”
A power of attorney for financial purposes authorizes someone you trust to manage your assets if you become physically or mentally disabled. This document is relatively inexpensive to have prepared and can be very valuable if the need arises. In my office, I make sure that I draft this document according to instructions, and then read through the document with the individual to make sure it meets with their expectations. The big advantage of this document is that if someone becomes disabled after signing it, the nominated “attorney-in-fact” can take care of the disabled individual’s financial matters. Of course, if someone becomes “physically” disabled, that person could always grant the power when needed. The problem is that none of us have a crystal ball and none of us can predict exactly “how” we may become disabled. If the physical disability includes a stroke, or a heart attack, or something that leaves someone unable to attend to their own financial affairs, and there is no power of attorney in place, it may be necessary to have a guardianship or conservatorship established formally by the probate court. That statement does not have to scare you. Most probate courts are run very well and have very good people. But, a formal guardianship or conservatorship is definitely more costly and less private than if your affairs can be managed with the financial power of attorney.
The same is true with regard to the power of attorney for health purposes. Most of us have an idea how we would want our healthcare managed if we were not able to make our own decisions. You will greatly increase the chances that your wishes will be followed by appointing a “patient advocate” in a durable power of attorney for healthcare before a disability strikes. Once again, since none of us know exactly “when” or “how” we could become incapacitated, it may be a good idea to have this document. Otherwise, if you become unable to make your own medical care decisions, then such medical care decisions may be made for you in a way that you may not have chosen for yourself, and may be made by a person you would not have chosen to make such decisions.