What is a Power of Attorney?


A power of attorney is a legal authorization that allows someone else to act in your place in matters related to finances, personal affairs and health care. If you ever become mentally unsound and unable to handle your own affairs, a durable power of attorney can stay in effect indefinitely.

With a valid power of attorney declaration in place, a trusted individual of your choosing — designated as your “agent” or “attorney-in-fact” — can legally oversee important matters in your life such as managing investments, paying bills, signing checks, making deposits, obtaining insurance, contracting for professional services, and making decisions about your health care if you cannot do so. The authority you grant to your agent can be as broad or narrow as you wish.

A power of attorney should be in writing, and you should sign it so your agent has proof of authority to act on your behalf. Power of attorney often is executed as a formal legal document that can be recorded with the local register of deeds in case your agent needs to use the authority regarding a real estate transaction.

Types of Power of Attorney

You can choose among several different types of power of attorney to meet your specific needs.

  • With a special power of attorney, you can grant specific powers to your designated agent. You may choose a special power of attorney if you’re unable to handle some of your affairs due to medical reasons or other commitments. Powers granted can include selling personal property, managing or selling real estate, overseeing business transactions and collecting debts.
  • A financial power of attorney allows your agent to oversee your financial affairs on your behalf. You can use a financial power of attorney for single transactions like closing a real estate agreement, or you can sign a durable financial power of attorney that allows your agent to manage all your financial affairs if you become unable.
  • A healthcare power of attorney allows your designated agent to make medical decisions for you if you become mentally incompetent or cannot make decisions for yourself.

Selecting the Right Person

You should have significant trust in the person you select for power of attorney authority. Whether the individual is an attorney, organization, business associate, loved one or friend, you’ll be trusting your power of attorney designee to act in your best interests and honor your wishes.

Your power of attorney agent should keep detailed records of any actions taken on your behalf and update you periodically so you stay informed. If you cannot review updates, you should ask your agent to provide the information to a third party such as a family member or a trusted attorney.

An agent acting under a power of attorney has legal liability for decisions made in the event of intentional misconduct. However, power of attorney documents typically protect agents who make a mistake with no ill intent. Agents with power of attorney usually are not paid.

Granting Power of Attorney in Michigan

Michigan law requires that power of attorney agreements be in writing and signed on a voluntary basis. The signer must be mentally competent at the time of signing.

If you wish to give someone else the authority to act on your behalf, you’ll need to sign a power of attorney form that specifies the authority you grant to your agent. Your estate planning attorney can advise you on the proper forms.

For a power of attorney declaration to be considered valid, you must be in a mentally competent state at the time of signing. If you are concerned that your mental capacity might be called into question, you may need to have your doctor sign a statement attesting to your competency. Your attorney can assist you in compiling appropriate documentation.

Work with an Experienced Estate Planning Attorney

Choosing the right person as your power of attorney agent is one of the most important decisions you’ll make in life, and it’s critical to meet all legal requirements to ensure that your wishes are honored. To speak with an experienced estate planning attorney in the Plymouth area, please contact Gold & Associates, P.C.

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