What is a durable power of attorney?

On Behalf of | Mar 9, 2021 | Estate Planning |

In Michigan, the law allows you to name someone else to take care of things on your behalf. You do this in a document known as a durable power of attorney.

Michigan statutes 700.5501 and 700.5502 explain how to create a durable power of attorney and what you can do with it.

Who are the people involved?

You are the principal, and the person you give authority to is the attorney-in-fact. He or she does not have to be a legal professional to fill this role. Actually, it is a fiduciary role and not a legal one.

When you create the document, you must sign it voluntarily or have a notary public sign it on your behalf. You must also have two witnesses sign it. The attorney-in-fact cannot serve as one of the witnesses. You must have a notary public endorse it.

How does the power of attorney work?

You specify in the document whether you want the attorney-in-fact to take care of matters for you during a certain time period or else in case of incapacitation. The document should also include the matters you want taken care of, and any instructions to that effect. Attorneys-in-fact usually receive compensation for performing their duties.

When the attorney-in-fact is performing his or her duties, in addition to adhering to your instructions, he or she must also follow the legal standards of care that apply to all fiduciaries.

How do you hold your fiduciary accountable?

You can require that the attorney-in-fact provide a report or accounting to you. If the role is to go into effect upon your incapacitation, you may want to have the report go to your guardian or conservator.

The attorney-in-fact cannot legally open a joint account or establish a joint tenancy with one of your assets so that he or she is a joint owner. If he or she does things in bad faith, the court can order those funds and assets restored to you.

Having someone you trust in this role can take some of the burden off of you when you most need it.