Without proper planning, dealing with estate matters and handling parent’s business and personal matters can become a modern-day Cain versus Abel family dispute. Before executing a power of attorney, family members should understand its powers, its place in estate planning and how sibling powers can be assigned and shared.
A general power of attorney covers an agent’s management of financial, business or personal affairs. This power is often exercised when a parent cannot govern their affairs because of ill health or other reasons. A health care power of attorney grants a sibling power to make health care decisions, usually under these conditions.
If a parent appoints one of their children as agent, that person has the sole power to act on the parent’s behalf. Other siblings must respect that agent’s authorization to act for their parent.
An agent holds a position of trust under a power of attorney. They must act strictly in their parent’s best interests and comply with Michigan law and other terms that help ensure this. But families can suffer turmoil if the siblings do not trust each other or major decisions are secretly made.
Problems can be avoided if parents are aware of the power that they are granting under a POA. The child appointed as agent must also understand their responsibilities. Other siblings must respect this power but also understand that there is a potential for mismanagement.
Another option is executing a joint power of attorney where a parent appoints two or more agents. The agents would have to act together or may have the power to exercise full authority independently. Joint authority may allow more accountability and protections because the children will have to agree to act together. But it may also lead to inflexibility and gridlock if the agents are unable to agree.
If there is more than one appointed agent, communication and openness are important to avoid family disputes. If financial information is needlessly withheld, for example, other family members may become suspicious and think the worst.
An attorney can help with advice on this estate matter and draft appropriate documents. Their guidance can help assure that these matters are dealt with expeditiously and with less rancor.