A power of attorney is a legal document that allows you to designate another person to manage your financial affairs. The person whom you designate for this role is your agent. Under a power of attorney, your agent can manage your financial affairs so long as you remain competent. If you choose to execute a durable power of attorney, however, then your agent will be able to continue to manage your affairs even after you become incapacitated or incompetent.
Some of the actions that a power of attorney can take include the following:
- Signing your checks
- Depositing checks
- Paying bills
- Entering into contracts on your behalf
- Buying and selling property on your behalf
- Obtaining insurance for you
- Making investment decisions for you
Perhaps the most important requirement of a power of attorney is that you sign it when you are legally competent to do so, rather than after you have become incapacitated. If you already are incompetent or otherwise incapacitated and you sign a power of attorney, it will not be legally valid. You also must sign this legal document in front of a notary or two witnesses in order for it to be valid. Finally, your agent must sign an acknowledgment of responsibilities and duties before he or she exercises any of these powers on your behalf.
Once you complete these steps, your power of attorney is immediately effective. If you don’t want your power of attorney to go into effect right away, then you can specify in the power of attorney that you don’t want it to become effective until you become incapacitated or unable to handle your financial affairs. However, if you only want the power of attorney to become effective when you become incapacitated, you need to specifically define what that means, so there is no dispute later on when your agent starts taking actions on your behalf.
Legacy Law Center handles all facets of estate planning for clients on a daily basis. We know how to best advise you, based on your circumstances, what options for estate planning are an option for you. Take the first step and call our office today to set up a meeting time with one of our Michigan estate planning attorneys.
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