Proven Partners For Financial Health

3 tips for creating effective powers of attorney

On Behalf of | Jul 26, 2023 | Estate Planning

Adults in Michigan need to both plan for their eventual deaths and also what they want to happen should they experience some type of medical incapacitation. Powers of attorney are among the specialized documents that the state of Michigan will recognize during someone’s incapacitation. Those who add powers of attorney to their estate planning paperwork will have peace of mind, as they’ll know someone that they trust can manage their affairs in the event of an emergency.

To create the most effective powers of attorney, those reviewing or expanding estate plans in Michigan may want to follow the three tips below.

Choose the correct agent

The individual authorized to take action on behalf of the testator will have significant authority. Financial power of attorney will give them authority to access resources and conduct transactions on behalf of someone incapacitated temporarily. Choosing someone who will not abuse their authority and who has the competence to manage finances effectively will be of the utmost importance for someone’s protection.

Include the right limitations

Overly broad, boilerplate powers of attorney may grant too much authority to an individual and leave a testator in a very vulnerable position. Testators have the option of limiting powers of attorney in multiple ways. They can require that they remain incapacitated for a set amount of time before someone has the authority to conduct financial transactions. They can also very carefully limit what type of transactions another person will complete on their behalf by only giving them access to certain resources.

Make the documents durable

The inclusion of the right language can have a profound influence on how useful powers of attorney are in the long run. Including specific clauses can make a power of attorney durable, which means that it will retain its authority even after someone becomes permanently incapacitated due to health issues. That step will effectively allow someone to choose the individual to manage their affairs instead of being at risk of a guardianship.

Those who approach the estate planning process with the right focus will be able to craft documents that ultimately give them more peace of mind and more protection should they ever experience incapacity and require the support of someone else to manage their financial matters.