Michigan residents often desire to be in charge over their own affairs. Most people want to be able to handle their own money, their own property and their own healthcare decisions. Many people can go their entire lives without needing help from anyone in making these decisions.
However, there are times when people are unable to make decisions on their own. For example, if a person has an accident and becomes incapacitated, that person may need another person to make medical decisions on their behalf. If someone has power of attorney over the injured person, then these decisions can be easily made.
Some may think that if they give another person power of attorney that the person will be able to do whatever they want. While it is true that a person with power of attorney has a lot of freedom when making certain decisions, Michigan law does restrict the power of attorney in some important ways.
For example, under section 700.5501 of the Michigan Estates and Protected Individuals Code, a person with power of attorney cannot make a gift of the principal’s assets unless the person is specifically given the power to make such a gift. Additionally, a person with power of attorney cannot enter into a joint account with the principal without express consent.
The attorney-in-fact must also keep the principal informed of the person’s actions and decisions. The person must also keep exact records of how investments, distributions and other financial transactions are made. Finally, the attorney-in-fact needs to take all reasonable steps to follow any instructions given by the principal.
Assigning a power of attorney can be an important part of an estate plan. People need to understand the powers that the person would have as well as their limitations. An attorney can help people understand these roles.