Michigan Power of Attorney | The Plan Firm

Estate planning involves a lot of documents. And the sheer variety of these can seem overwhelming at times:

“Do I need a will or trust?”
“What’s the difference between a power of attorney and an advance directive?”
“Where do I even start to figure out what’s best for me?”

All estate planning documents are designed to ensure that your wishes are known, in the event that you are unable to make your own decisions. However, a will is activated only upon your death, while other documents may take effect during your life. This includes power of attorney, a key element in many elder care plans.

What is a power of attorney?

A power of attorney (or POA) allows you (“the principal”) to appoint a person to act on your behalf. This person, known as the “attorney-in-fact” in Michigan, can then make legal, financial and even medical decisions, as specified in the documentation.

In some states, there is a specific form for the different types of power of attorney. However, in Michigan, this can be a more complex process.

There is no standard power of attorney form in Michigan. Instead, each POA must be crafted to meet specific legal standards, which also may be different based on your individual situation. In addition, these standards may change as related laws are updated.

While this can be a confusing process, when considering a power of attorney it helps to get an understanding of the four basic types in Michigan.

General Power of Attorney

This type gives broad authority to your attorney-in-fact to make decisions on all financial or legal matters.
It takes effect immediately and is canceled if you become incapacitated, pass away or choose to end the POA.
While it may seem strange to have an arrangement that ends when someone becomes incapacitated, a general POA was historically helpful. For example, when a person would entrust someone to help coordinate financial or legal matters with supervision.

Durable Power of Attorney

This is similar to a General POA in that it grants broad powers, but a Durable POA remains active after you become incapacitated.
This is particularly helpful in elder care and end-of-life situations.
It gets canceled if you pass away or choose to end it.

Springing Durable Power of Attorney

This takes effect (“springs” into action) only when you become incapacitated.
A springing POA is canceled if you pass away or choose to end it.

Special Power of Attorney

Also known as a Limited POA, this type is customized to give your attorney-in-fact the authority to make decisions in one or more specific areas if you become incapacitated.
For example, granting a business partner the authority to take care of the company, or granting a family member the power to handle real estate transactions.

Michigan Designation of Patient Advocate

In addition, there are other specific elements that can be included as part of the power of attorney process. A common example is the Michigan Designation of Patient Advocate (also known as a medical or healthcare POA). This is used to give authority to someone to make medical decisions when you’re incapacitated.

Power of attorney is just one of three key types of documents that are designed to pass authority to someone else to make financial or medical decisions for you. I’ll be discussing the other two, trusts and advance directives, in future posts.

Michigan power of attorney: Understand the 4 main types