Previous posts here have detailed how important it is to have a sound, comprehensive estate plan. But, what exactly is the most important part? Some would argue that it is the will, some that a certain trust is a priority. It really does just depend on the situation, but one part that can make the most difference during a critical time is the inclusion of powers of attorney.
A recent article asked, why are powers of attorney so important? Well, it is because many people don’t think about what exactly they would decide during some of life’s most crucial moments – after a car accident and hospitalization, for example – until it is too late. But what if a person is so badly injured in an accident that they are effectively incapacitated? How will doctors know what steps a person would prefer in their medical treatment, and how will others know how to take care of that person’s financial affairs?
In Michigan, there are two kinds of power of attorney: a durable power of attorney and a health care power of attorney. A durable power of attorney is needed to empower a representative to look after financial and business affairs, and to make any decisions which are required on that front during the planner’s period of incapacity. A health care power of attorney appoints a patient advocate to make medical decision on the incapacitated person’s behalf. For each of these documents the appointed representative can be a trusted family member, friend or associate, and they do not have to be the same person for both.
Estate planning can be confusing to someone who is considering for the first time how to best plan for the succession of their possessions and assets, as well as planning for the late stages of life. Some estate plans can be complicated, others can be quite simple. It usually depends on the size of the estate in question. However, one thing that is almost always true: everyone should have an estate plan, and that estate plan needs to include all of the appropriate documents, including powers of attorney.
Source: money.usnews.com, “How to Develop Effective End-of-Life Plans,” Philip Moeller, Feb. 26, 2013