A “Durable” Power of Attorney (”DPOA”) should be a part of every estate plan, regardless of whether you are using a will, a living trust, or do nothing at all. A DPOA is a legal document in which you appoint someone, called an “agent” or an “attorney-in-fact”, to handle your personal, non-medical, decisions. Without one, someone may have to petition the probate court to become appointed as a Conservator for you, which is a complicated and expensive process.
It can be drafted to be effective immediately or only when you become disabled. Like a Medical Power of Attorney, the legal authority and requirements for a DPOA are prescribed by statute in Michigan. Unless you have a “durable” power of attorney that complies with this statute, your agent’s authority to act for you may cease when you become incapacitated, which is the time when you are most likely to need that agent’s assistance.
Choosing a person to act as your agent is a very important decision. The person chosen must be an adult. You should take into account that person’s level of maturity, relationship to you and your family, as well as where they live. The DPOA should be drafted in such a way that your agent receives all the powers necessary to handle affairs for you. It is wise to name one or more alternate agents in the DPOA in case your first choice is unable or unwilling to act.
In addition to helping you avoid lifetime probate, a DPOA is essential to do planning which can help protect your assets from being consumed by long term care costs through the Medicaid and Veterans programs. The document should tailored to meet your particular needs.
If your estate plan is more than five years old you should have the document reviewed to ensure that it includes a properly drafted DPOA. This is especially true if you are relying upon a “combined” medical and financial power of attorney.