A power of attorney is one of those documents that most people have heard of but few fully understand — until they need one. And by then, it’s often too late to put one in place.
In Michigan, a properly drafted durable power of attorney can be the difference between your family handling a crisis smoothly and spending months in probate court trying to obtain the legal authority to manage your affairs.
What Is a Power of Attorney?
A power of attorney is a legal document that authorizes another person — called your “agent” or “attorney-in-fact” — to act on your behalf in financial and legal matters.
The person creating the document is called the “principal.” The agent you designate can pay your bills, manage your bank accounts, handle real estate transactions, file your taxes, and conduct a wide range of other financial matters on your behalf.
What Makes It “Durable”
A standard power of attorney becomes void if the principal becomes incapacitated. A durable power of attorney remains effective even if you lose mental capacity — which is precisely when you need it most.
Under Michigan law (MCL 700.5501 et seq.), a durable power of attorney must contain specific language indicating that it survives the principal’s incapacity. Without this language, the document is not durable and will be ineffective in an incapacity situation.
Why You Need One
Consider a scenario: you suffer a stroke or serious accident and are temporarily unable to manage your finances. Without a durable power of attorney, your spouse or family members have no legal authority to access your bank accounts, pay your mortgage, or handle your financial affairs — even if their names are on joint accounts.
To obtain that authority, they would need to petition the probate court for a conservatorship. That process is expensive, time-consuming, and public. It can take months and cost thousands of dollars — all while your bills go unpaid and your financial affairs fall into disarray.
A durable power of attorney solves this problem entirely. Your designated agent can step in immediately, without court involvement, and handle everything on your behalf.
Choosing the Right Agent
Your agent has significant power over your financial affairs, so choosing wisely is critical. Consider:
Trustworthiness — Your agent will have access to your accounts and assets. Choose someone with absolute integrity.
Availability — Your agent needs to be reachable and able to act when needed. Geographic proximity matters.
Financial competence — Your agent doesn’t need to be a financial expert, but they should be organized, responsible, and capable of managing financial tasks.
Willingness — Always ask the person before naming them. The role carries real responsibility, and your agent should understand and accept it.
It’s also wise to name a successor agent — someone who can step in if your primary agent is unable or unwilling to serve.
What a Michigan POA Can and Cannot Do
A durable power of attorney can authorize your agent to handle virtually any financial matter, including:
- Banking transactions and account access
- Real estate purchases, sales, and management
- Investment account management
- Tax filings and payments
- Business transactions
- Insurance matters
- Gift-giving (with appropriate limitations)
However, there are things a power of attorney cannot do. Your agent cannot make or change your will, make decisions after your death, or act in ways that violate their fiduciary duty to act in your best interests.
The Importance of Michigan-Specific Drafting
Michigan’s power of attorney statute has specific requirements that must be met for the document to be valid. The document must be signed before a notary public and two witnesses. Certain individuals — including your agent — are disqualified from serving as witnesses.
Generic power of attorney forms downloaded from the internet frequently fail to meet Michigan’s specific requirements. A document that doesn’t comply with MCL 700.5501 may be rejected by banks, financial institutions, and courts — leaving your family without the authority they need.
When to Put One in Place
The time to execute a durable power of attorney is while you are healthy and have full mental capacity. Once you lose capacity, you can no longer legally execute the document — and your family’s only option is court intervention.
Don’t wait for a health crisis to prompt action. A durable power of attorney, along with a complete estate plan, is one of the most important gifts you can give your family.
George Remy is a Michigan-licensed estate planning attorney with 18 years of experience. Schedule a free 15-minute consultation at remylawpllc.com.