Today, most of us use computers, phones, and tablets to send messages, check in with friends, carry out important financial transactions, watch TV and listen to music, and even to conduct business. Case in point? Odds are very good that you’re reading this post on a smartphone, tablet, or computer screen right now! 

The more we all use technology in our everyday lives, the more digital assets we create. Have you ever thought about what might happen to your digital assets when you’re no longer around to manage them? What do you want to happen to your social media and email accounts? Who do you want having the log-in information for your online financial accounts? How will you ensure that your loved ones are able to download precious family photos and videos? 

Just as it’s important to have a plan for your tangible property, real estate, and financial accounts, it is essential to consider what will happen to this ever-growing list of digital assets should you become incapacitated or pass way. 

For this reason, it is crucial that you discuss a plan for your digital and hybrid assets with your estate planning attorney. A knowledgeable and savvy lawyer can assist you in identifying your most prominent digital assets, while also taking care to ensure that you maintain control over these important accounts and profiles after you’re gone — such as determining how these assets will be managed, and who will be able to access them. 

Let’s dig into a few major FAQs about estate planning for digital assets:

“What Digital Assets Should Be Considered for Estate Planning Purposes?”

Today, nearly every facet of our day-to-day lives can be performed and managed online. As a result, a digital asset could refer to any number of things — ranging from media files to social networking accounts. You may also have some important estate planning assets that could be considered “hybrid” assets, such as an investment account that you generally access and manage online. 

Curious what might fall into this broad and ever-expanding category? Here are a few of the common digital assets that you may already own: 

• Social media accounts
• Email accounts
• “Paperless” online banking and investment accounts
• Online subscription accounts
• Website domains
• Cryptocurrencies (such as Bitcoin)
• Digital photos, vidoes, and other files stored in the cloud or on Dropbox
• Income-generating content published on the web (such as blog posts, written articles, or videos)
• Digital copyrights and trademarks

If you do not make a plan for these assets, they could become incredibly difficult for your loved ones to access when you are gone. Issues like lost passwords, data encryption, and byzantine platform terms of service agreements can make accessing, closing, or transferring these common assets a nightmare. 

“Does Michigan Have Any Laws Governing Access to a Decedent’s Digital Assets?”

Michigan is among the sizable group of states that has enacted a version of the Revised Uniform Fiduciary Digital Assets Act, which governs access to an individual’s digital assets when the account owner dies or becomes unable to manage them. 

Enacted in 2016, Michigan’s Fiduciary Access to Digital Assets Act defines a digital asset as “an electronic record in which a user has a right or interest.” The person or company that “carries, maintains, processes, receives, or stores a digital asset of a user” is known as a digital custodian. This law provides for access to a decedent or protected individual’s digital assets by a fiduciary, such as a personal representative, trustee, conservator, or agent under power of attorney.

Broadly speaking, the Fiduciary Access to Digital Assets Act helps extend the power of a fiduciary to encompass the management of digital assets. While the act allows fiduciaries to manage digital property such as computer files, web domains, and cryptocurrencies, it largely restricts a fiduciary’s access to electronic communications unless the original user gives their fiduciary access through a will, trust, power of attorney, or other written mechanism. The act also specifies what information a fiduciary may need to present to a digital custodian in order to gain access to digital assets,  as well the requirements and procedures for disclosure by a digital custodian. 

If you are interested in how this act may affect you as a testator, personal representative, or trustee, do not hesitate to contact a shrewd and savvy estate planning attorney in your area. An estate planning lawyer can help you understand everything that goes into creating a functional estate plan that includes your digital assets.

 If you are acting on behalf of an estate, an estates and probate attorney can provide informed professional advice to guide you through the legal process, explain your legal obligations as a fiduciary, and help you discharge your duties in an efficient and expedient manner to avoid personal liability.

“How Can I Make a Plan for My Digital Assets?”

So, what goes into addressing your digital assets within your comprehensive estate plan? Here are a few important steps to keep in mind as you move forward:

• Inventory. One of the most important steps you can take is to thoughtfully and comprehensively list your digital assets. Create a list of online accounts and profiles that your loved ones need to know, as well as information for how to access them. Consider backing up cloud-based data on a physical hard drive, or using an online password manager to keep your records organized. Make sure your inventory is safely stored with your attorney or in a secure place — but take care to ensure that your fiduciaries will be able to access it when the time comes. Learn more about safeguarding your estate plan here. 
• Plan. Once you have gotten a handle on your digital assets, talk with your attorney about who you want to be able to have access, and what steps you want them to be able to take to manage, transfer, or close the accounts. For instance, you may want to have your social profiles deleted, or empower your fiduciary to change the passwords for your business accounts. Look into the terms of service and rules for the various online platforms you use, and consider looking into online tools that can streamline communication between your fiduciary and any digital custodians. 
• Execute. Work closely with your attorney to draw up will, trust, and power of attorney documents that thoughtfully address your estate’s digital needs. For instance, you may specify whether or not you want to grant your personal representative full or partial access to a specific account. An attorney can help assure that your language is clear, precise, actionable, and effective. 

Have Any More Questions About Michigan Estate Planning and Probate? We Are Here For You

There is no reason to put off taking care of those you love and that which you have worked hard for. 

Looking for guidance on the many moving pieces that go into successful estate and incapacity planning, including wills, trusts, powers of attorney, guardianship, and conservatorship? Your Michigan probate attorney Dean E. Patrick is here to help.

Mr. Patrick is a licensed Michigan lawyer specializing in estates and probate law. He has helped hundreds with their estate planning needs, giving him the necessary knowledge to provide unparalleled legal advice and assistance that can make your life a little easier.

If you have questions or are curious about how to move forward, contact our offices at (248) 663-2566 or reach out online to set up your initial consultation.

This post has been prepared for general information purposes only. The information you obtain here is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and electronic mail.  Accessing the content of this site does not create an attorney-client relationship.  Nor, does contacting us create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

Estate planning is one of the most powerful and important steps you can take to prepare for the future — and it’s crucial to make sure that no critical step gets overlooked, forgotten, or misplaced along the way.

Unfortunately, many people end up committing one or mistakes or mishaps during the estate planning process, which could jeopardize or invalidate their entire plan — and end up making things a lot more difficult for themselves and their loved ones in the future.

Working with an experienced and professional estate planning attorney is one way to make sure you dot every “i” and cross every “t,” so that you can move forward with confidence. Here are seven all-too-common Michigan estate planning mistakes to discuss with your lawyer:

1.) Starting Too Late

The only things that go away with time are snowflakes, youth, and opportunities. With estate planning, you have an opportunity to plan for yourself and your loved ones — and it’s important that you don’t let it pass!

A 2020 poll cited by CNBC suggests that about 62% of Americans say that they do not have a will. A 2020 report from Caring.com, meanwhile, indicates that less than one-third of all Americans (32%) have any estate planning documents in place. What’s more, Caring.com data suggests that the number of older and middle-age adults with estate planning documents actually fell by 20% and 25% between 2019 and 2020.

When we pass on, the assets we have acquired throughout our lifetimes will remain,  and they will be reallocated. The question is: Will you have a say in the matter? 

If you do not have an estate plan in place, you are giving up control. If you do not make a plan, the state of Michigan will create one for you. Michigan’s rules of intestate succession are very strict, which could result in your assets being distributed in ways that you would not have wanted. Meanwhile, failing to make a plan could cause the estate administration process to be significantly longer, more costly, and more contentious for your surviving loved ones. 

2.) Forgetting to Plan for Probate and Estate Administration

Probate is often used as a catch-all term to refer to the legal process a decedent’s estate must succumb to in the courts. Here in Michigan, the ins and outs of the estate administration process can be complex, costly, and time-intensive — particularly if a will contest or similar issue arises after your passing. 

Fortunately, there are many important steps you can take proactively, to help ensure that you have made probate as smooth and simple as possible for your loved ones. For instance, you can utilize a number of different mechanisms to transfer many of your most important and valuable assets outside of probate, including: 

• Trusts. Trusts offer numerous estate planning advantages, including the capability to help many types of assets — such as investments and securities, tangible personal property, bank accounts, business interests, and real estate  — bypass probate. The inter-vivos or revocable living trust is one of the most popular types of trusts in the United States, in part because it can help avoid probate and help families avoid court fees and stringent oversight. Learn more about using trusts as part of your estate plan here. 

• Beneficiary Designations. Retirement accounts, life insurance policies, bank accounts, annuities, pension plans, investment accounts, and securities can be set up with a designated beneficiary, known as a “pay on death” or “transfer on death” beneficiary. When executed properly, this designation allows for the assets in an account or proceeds of a policy to transfer directly to the named beneficiaries upon the death of the account owner or policy holder, outside of probate. 

• Jointly Owned Assets. Full ownership of real property owned through joint tenancy with rights of survivorship automatically transfers to the surviving co-owner upon the passing of the decedent, outside of the oversight of the probate courts. Property that is owned by married couples who share ownership as tenants by the entireties also transfers outside of probate. Joint tenancy designations can allow you to avoid probate without increasing your liability. Learn more about joint tenancy and tenancy by the entireties here. 

Taking steps to help assets avoid probate can have numerous positive benefits for yourself, your estate, and your family and friends, including: 

• Peace of mind knowing you minimized the stress of your circumstances for your family
• Assurance that your partner will the assets and control you want them to have
• Allowing for immediate distribution of your assets
• Maximizing the assets available to your beneficiaries when you have passed
• Minimizing or eliminating the cost of probate fees

An experienced legal professional can help you coordinate the use of probate and nonprobate transfers as part of your estate plan.

3.) Failing to Properly Fund Your Revocable Living Trust

Funding a trust is just as important as creating it in the first place. Too often, though, people overlook this important step! 

Once you have set up your trust, it is very important to re-title your chosen assets into the trust, or this incredibly useful mechanism will remain an empty vessel. Remember that assets not properly titled into the name of your living trust will be subject to probate as part of your estate. 

An expert in estate planning and trust law like our own Dean E. Patrick can not only assist you with the creation of the trust, but also ensure that all legal formalities are addressed so that your trust is completed to your specifications. In addition to selecting and re-titling the assets you want to place into your trust, this might also include naming a successor trustee to assume responsibility for managing and distributing trust assets when you are no longer able to do so. 

4.) Not Planning Ahead for Incapacity

While it is never pleasant to think about, the reality is that no one is immune from suffering an accident or falling victim to an unexpected illness. An important part of estate planning that many people forget about is making plans for incapacity, including naming the person you want making decisions for you when you are unable to do so for yourself. 

If you do not take precautions when you have the chance, your loved ones could be subject to the arduous and costly process of living probate. 

Even if you do not have many high value assets, it is important to plan ahead for the possibility of incapacity; the experiences of 2020 are a painful reminder of that fact. One of the most important steps you can take to prepare for incapacity is to utilize durable powers of attorney. 

A durable power of attorney is a legal document that gives someone of your choice (known as your agent, advocate, or attorney-in-fact) the right to handle your decisions if you become incapacitated. With a durable power of attorney, you don’t give up any control as long as you are capable. In Michigan, you can name a power of attorney for health care, a power of attorney for mental health, and a power of attorney for financial matters. 

5.) Forgetting to Review or Update Your Plan Over Time

The only constant in life is change. For this reason, it is important to remember that creating an estate plan is not a one-time, “set it and forget it” process. Instead, it is crucial to regularly reevaluate and, if needed, update or revise your estate plan over time. 

The reality is that no one knows for sure what’s in store for the future. Your named beneficiaries might predecease you; you could go through a divorce or estrangement that changes your personal relationships with your family members; you might move to a new state, acquire valuable new assets, or make new investments. Things outside of your control with estate planning implications might change over time, as well, such as state and federal tax laws. 

Depending on your circumstances, there are many steps you can take to stay on top of things, including: 

• Regularly reviewing your beneficiary designations
• Naming contingent beneficiaries 
• Reviewing your will and trust paperwork and replacing documents, as needed
• Reviewing your powers of attorney 
• Reviewing your guardianship, conservatorship nominations

A knowledgeable local attorney can make sure to keep things on track. A legal professional can help you to set a schedule to revisit your estate plan, while considering all the unique variables of your situation. When it’s necessary to make changes, an attorney’s shrewd guidance can help you to ensure that you update or replace your documents correctly, to make sure that things are as clear and direct as possible for your personal representative and trustee in the future.

6.) Failing to Plan for Minors or Beneficiaries WIth Disabilities

It is natural to want to make sure your loved ones are well cared-for when you are no longer around. But do you have a specific plan to make it happen? Estate planning is a powerful way to provide for the people who matter most to you. But it is important to be thorough and thoughtful, especially if you are planning ahead for minor children or adult beneficiaries who happen to be physically or mentally disabled. 

One of the most important considerations when creating a will is nominating a guardian, who will become responsible for the care and custody of your minor children when you are no longer around. An attorney can help you consider your options and make the best selection for your circumstances. 

Meanwhile, you can utilize your estate plan to help make sure your loved ones receive crucial assets and funds — while making sure that inheritance is not detrimental to your beneficiaries down the line. For instance, you can utilize trust provisions to help ensure that funds meant for your minor children are not squandered by a guardian, or that children are not able to access funds until a certain date. Similarly, a trust can help you provide for your loved ones with special needs, particularly if they are receiving government benefits that might be affected by receiving an inheritance. You can also include spendthrift provisions, to help prevent beneficiaries from wasting their trust assets from excessive spending. 

7.) Not Working With an Experienced Professional

As we often say: When you have a foot problem, you go to the podiatrist. When you have a heart problem, you go to the cardiologist. When you are forced into the probate court or want to create a comprehensive estate plan that will take care of your assets and provide for your loved ones, you need to go to an established probate and estate planning attorney.

An attorney is uniquely qualified and capable to help you consider your specialized circumstances, and create the estate plan that will best suit your goals. A knowledgeable legal professional can help you understand how all of the important pieces of an estate plan may work together, while also getting a handle on the financial and tax implications of estate planning and inheritance, and how they might apply in your situation. As you create estate planning documents, an attorney can help ensure that the language is clear and concise, and that every formality is executed fully and properly — so that you can get some well-deserved peace of mind. 

Have Any More Questions About Michigan Estate Planning?

At the Law Office of Dean E. Patrick, our goal is to provide you with only the best professional legal services available in Michigan. Work with us and you have our sincere promise to carefully plan and manage each and every step of your legal matter from start to finish.

When it is time to take care of your estate planning needs, get the answers, insight, and guidance you and your beneficiaries deserve. Whether you are trying to avoid probate with a trust, want to make sure your assets are protected and transferred according to your wishes, or want to plan for incapacity with powers of attorney, we can custom tailor a solution to suit your needs.

Mr. Patrick is a licensed Michigan lawyer specializing in estates and probate law. He has helped hundreds with their estate planning needs, giving him the necessary knowledge to provide unparalleled legal advice and assistance that can make your life a little easier.

If you have questions or are curious about how to move forward, contact our offices at (248) 663-2566 or reach out online to set up your initial consultation.

This post has been prepared for general information purposes only. The information you obtain here is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and electronic mail.  Accessing the content of this site does not create an attorney-client relationship.  Nor, does contacting us create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

Unfortunately, it’s inevitable for bad things to happen. Fortunately, it’s possible to take precautions to make bad situations easier to manage. If something happens that leaves you unable to make or communicate decisions for yourself, a durable power of attorney is a tool that can help ensure that someone you trust will be empowered to manage your financial and health care decisions. 

Broadly speaking, a power of attorney (POA) is a written instrument that gives legal authority to a third party (known as the agent or attorney-in-fact) to act on the behalf of someone else (known as the principal). 

In estate and incapacity planning, the most common type of power of attorney is the durable power of attorney. A durable power of attorney contains specific language that ensures your agent can act even if you become incapacitated, while keeping the power in your hands for as long you can make decisions for yourself. For the purposes of estate and incapacity planning, there are a few different types of durable powers of attorney to consider, including:

• Durable power of attorney for health care. This durable POA gives someone of the principal’s choosing the right to handle health care decisions in they event that the principal becomes incapacitated. This might include seeking treatments and making end-of-life decisions.
• Durable power of attorney for financial matters. This type of durable POA gives the agent the right to handle the principal’s financial affairs and transactions should they become incapacitated, including transferring assets into a trust, pursuing claims or actions on their behalf, managing business affairs, selling property, and more.

While no one wants to think about the possibility of suffering from an accident or succumbing to an illness, taking steps to put a power of attorney in place can help make sure that your wishes are respected and carried out. In addition to keeping you in control, this can make a difficult time easier to navigate for your loved ones — protecting their privacy while helping them avoid the costly and time-intensive living probate system. On a personal level, taking time to think about a power of attorney can help you attain your goals — and gain some well-deserved peace of mind. 

With that said, there are many important considerations to factor in when contemplating a power of attorney — including the potential for power of attorney abuse. 

What Is Power of Attorney Abuse?

We know that the reasons why someone would might to ensure they have an agent ready with durable power of attorney are scary. And it can be just as scary to think about what would happen if your agent or attorney-in-fact were to take advantage of their status. 

In a writing, the National Center on Elder Abuse (NCEA) describes power of attorney abuse as

the misuse by the agent of the authority granted by the principal. It means making a decision or taking an action that is not in the principal’s best interest. 

Under Michigan law, agents designated and acting under a durable power of attorney are subject to certain rights, restrictions, and responsibilities. First and foremost, agents are expected to act in accordance with the standards of care applicable to fiduciaries — meaning broadly that they are obligated to act in good faith, and put the best interests of the principal and the estate above their own.

The agent is expected to take reasonable steps to follow the instructions of the principal, and to be able to provide an accounting to the principal (or a court-appointed guardian or conservator) upon request. Agents are also expected to maintain records of their actions taken on behalf of the principal, including documenting transactions, receipts, disbursements, and investments.

Unless provided for in the power of attorney or by judicial order, the agent or attorney-in-fact cannot make a gift of all or any part of the principal’s assets. They are also barred from creating an account or other asset in joint tenancy with the principal, unless ordered to do so by the court or the POA. 

Actions that constitute an abuse of power of attorney might include making decisions that are decidedly not in the principal’s best interest. For instance, an agent might take advantage of their position to spend the principal’s money for their own benefit — such as buying him- or herself expensive goods or supporting their private business interests, rather than using funds for the principal’s care. Similarly, the agent may attempt to give away some of the principal’s property as gifts, without having the proper authority to do so.

In other situations, power of attorney abuse may occur if the POA itself is created through fraud, forgery, or coercion. 

The reality is that agents and advocates can and do sometimes steal and attempt to take advantage of the principal. Part of the reason why, as the NCEA explains, is that powers of attorney:

usually are not subject to oversight by a court or third party. If the principal becomes incapacitated and can no longer monitor the agent’s actions, this lack of oversight for a broadly written legal document makes it very easy for an agent to abuse the authority granted by the principal.

For this reason, some cynical observers have been known to call powers of attorney “a license to steal.” 

However, there are also remedies and solutions that can help protect the principal and their assets. As the Michigan Bar has put it in a writing, if an agent abuses their authority, anyone involved in the principal’s welfare

can ask the probate court to get involved, cancel the durable power of attorney, and either appoint a conservator to handle [the principal’s] affairs or enter some other protective order on [the principal’s] behalf.”

An experienced attorney can help you understand the specifics of your circumstances and consider appropriate action. This might include pursuing litigation against the agent for breach of fiduciary duty, including holding the agent liable for any damage or loss to the principal. Families or other interested parties faced with an abuse of power of attorney might also pursue other types of civil lawsuits, as well. A knowledgeable local attorney can also help you to understand if the matter constitutes elder abuse under Michigan law. 

Depending on the circumstances, individuals may also be able to pursue criminal charges if the agent violated state or federal laws by committing crimes such as forgery, fraud, exploitation, or embezzlement, as the NCEA explains.

How Can You Avoid Abuse of Power of Attorney?

A Michigan estates and probate attorney can help you choose the tools and solutions that will be best suited for your individual circumstances. As you sit down with your legal professional, here are a few ideas to discuss that may help minimize the likelihood that someone will be able to abuse or take advantage of a power of attorney:

Be extremely selective when choosing an agent.

As when choosing a personal representative or trustee, it is important to be selective of who you entrust with the important responsibility of acting on your behalf as an agent or attorney-in-fact. Consider the character of the agent, and how well they fit with the responsibility you are giving them.

Do you trust them completely to make decisions in your place? Are they fiscally responsible, so as to be able to handle your financial or personal affairs appropriately? Are they responsive and capable? Do you trust them to communicate effectively with other members of your family, local financial institutions, or the courts? Remember, this process is not about making people feel equal. It is about ensuring your wishes are respected and carried out when you no longer have a say in the matter.

Take action to limit or restrict the agent’s powers.

The powers granted to an agent or attorney-in-fact can be quite broad, or fairly narrow. If you are a principal, an experienced and knowledgeable attorney can help you tailor a power of attorney that will suit your needs and goals. For example, you could grant your chosen agent the ability to make only certain financial transactions, such as paying bills. You can also use your power of attorney to impose certain requirements on your chosen agent — for instance, a requirement to provide regular accountings, or to stay in communication with your family. 

Consider nominating co-agents.

When in doubt, you may wish to consider splitting up responsibilities. You can always grant powers of attorney to more than one individual; this can help provide a system of checks and balances, and help ensure that one person cannot take action alone. 

Actively review your estate and incapacity planning documents on a regular basis.

Broadly speaking, a principal can revoke or replace a power of attorney at any time, as long as they have capacity and follow all proper protocols to do so. It is generally a good practice to review your estate and incapacity planning documents with your attorney every few years, in order to make sure that your plans still fully and accurately reflect your wishes.

Keep the Discussion Going with Metro Detroit’s Probate and Estates Attorneys

Interested in learning more about powers of attorney in Michigan?  Ready to start preparing for the future, and take control over who will make important decisions in the event that you become incapacitated?

For all these important matters and more, it’s wise to have an intelligent and experienced lawyer at your side, fighting for your rights and the well-being of your loved ones.

Our skilled law firm is here and ready to assist with all of your incapacity and estate planning needs, including guardianships, conservatorships, and powers of attorney.

If you require further legal advice or if you are looking for representation as you navigate Michigan’s tricky court system, don’t hesitate to call our Southfield, Michigan office at (248) 663-2566 to set up your consultation initial consultation. You may also click here to get in touch online.

At the Patrick & Associates, PLLC., we will work hard to accomplish your goals, while handling your matter with professionalism and expertise. Mr. Patrick can help you navigate through all the legalities and formalities, so that you can rest assured that you and your loved ones will be taken care of, whatever life brings.

This post has been prepared for general information purposes only. The information you obtain here is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and electronic mail.  Accessing the content of this site does not create an attorney-client relationship.  Nor, does contacting us create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

Estate planning is one of the most useful and important steps you can take to prepare for the future — but it is also one of the most commonly misunderstood. 

There are plenty of myths and misconceptions out there about estate planning and probate, which hold people back from taking action when they have the chance.

Put simply, having an estate plan in place is a way to keep control of your most important assets, and have a say in the matters that will directly impact the people you care about even when you are unable to speak on your own behalf. There are a variety of tools that can be used as part of an estate plan, including wills, trusts, and powers of attorney. Which instruments to use will depend on the specifics of your circumstances.

Interested in learning more about estate planning and the probate process here in Michigan? Separating fact from fiction is an important way to get started. Let’s get to the bottom of seven all-too-common estate planning myths:

MYTH #1: “Only wealthy people need to think about estate planning.”

Estate planning is not just for the wealthy; it is for anyone who wants to be able to stay in control, no matter what the future has in store. 

Regardless of how many assets you have acquired up to this point in your life, estate planning is an important step that gives you a say in how your property will be reallocated when you’re gone. Importantly, you can also use estate planning mechanisms, such as your will, to care for your loved ones when you cannot be there to provide for them yourself. Nominating a guardian for your minor children is an important piece of the typical estate plan, as is nominating a conservator to handle the financial affairs of your incapacitated loved ones. You can also use a trust to assure distribution of your assets in a manner appropriate for your circumstances, and maximize the assets available to your beneficiaries.

At a minimum, like it or not, we should also all have a plan for incapacity. While it’s never fun to think about what would happen if you were to sustain a major injury or succumb to illness, it is necessary to ensure your affairs are handled in the way you would want — and to keep your family out of the arduous and complicated process of living probate. In recent months, the coronavirus pandemic has served as a vital reminder of the importance of incapacity planning.

MYTH #2: “Estate planning isn’t something I have to think about until I’m much older.”

According to a recent poll cited by CNBC, about 62% of Americans say that they do not have a will. Taking it one step further, a report from Caring.com suggests that less than one-third of all Americans (32%) have any estate planning documents in place. 

While many people believe that they only need to start thinking about estate planning later in life, the reality is that putting it off for too long could be disastrous for yourself and your loved ones. 

Estate planning is a relevant and important concern if you have any property you want to distribute, or any loved ones you want to provide for when you’re gone. This makes it a critical consideration, no matter what stage of life’s journey you may currently be on. Whether you are recently married or divorced, a first-time homeowner or a retiree getting ready to downsize, there are estate planning tools and mechanisms that can make life easier for yourself and the people you care about. Importantly, you can also update and refine your estate plan over time, to ensure that it always aligns with your goals and expectations as your circumstances change. 

In short? The only things that go away with time are snowflakes, youth, and opportunities. You have an opportunity to plan for you and your loved ones now. Why would you let that pass?

MYTH #3: “If I’m married, my spouse will inherit everything and get to bypass probate.”

Although your spouse is entitled to assets from your estate, if you have not put a plan in place, your spouse will likely be subject to the probate court and its control. 

Without an estate plan, you leave things up to chance. If you do not make decisions about the allocation of your property and assets when you have the chance, you will end up leaving things to Michigan’s laws of intestate succession. These strict and complicated laws determine what happens to a decedent’s estate when they do not have a will. Ultimately, leaving things up to intestate succession could result in your assets being distributed in a manner that you would not want. While your spouse is entitled to some assets, other people in your life may also be able to claim a share of your intestate estate — such as an estranged child, or a parent you’ve broken off contact with. 

What’s more, failing to leave a roadmap could open the door for bitter contests and disputes, including family arguments that turn into prolonged legal battles. 

Having an estate plan in place can help assure that your partner gets the assets and control you want them to have. If nothing else, estate planning is a straightforward way to offer guidance and protection to your spouse, making a difficult and uncertain time far easier to navigate.

MYTH #4: “Having a will is enough to bypass probate.”

Having a will does not mean that your estate will avoid probate.

However, if you have assets in your name and want to control the distribution of those assets when you pass, a will can accomplish that goal. Having a will helps facilitate the probate process, and, when executed properly, can help to avoid or minimize the potential for contests.

Importantly, wills also offer you the ability to carry out any number of important tasks, including: 

• Nominating someone you trust to serve as personal representative, and handle your affairs in the probate court.
• Nominating a conservator to handle the financial affairs of your minor or incapacitated adult children or loved ones. 
• Nominating a guardian to handle the care, custody, and control of your minor children to assure they grow up the way you intended.
• Establishing a long-term distribution scheme for loved ones who are not as financially savvy as you would like, usually working in conjunction with other estate planning tools such as a trust.

MYTH #5: “I have a power of attorney in place. My agent can distribute my assets when I pass.”

A power of attorney is an important tool, which may be used in conjunction with a will or trust. However, it is limited in its scope — particularly once you’ve passed away. 

Broadly speaking, a power of attorney is a written instrument that gives legal authority to a third party (known as the “agent” or “attorney in fact”) to act on the behalf of someone else (known as the “principal”). In estate planning, power of attorney (POA) is a tool that can be used to ensure that someone you trust manages your financial and health care decisions when you no longer can. 

For estate planning purposes, it is imperative that the power of attorney used can be classified as a “durable” power of attorney. A durable POA contains specific language that ensures your agent can act even if you become incapacitated, while keeping the power in your hands for as long you can make decisions for yourself. However, when the principal on the power of attorney passes away, the agent’s power is dissolved. 

Fortunately, there are other mechanisms that can be used to ensure that your wishes will be carried out after you’re gone — such as nominating a personal representative in your will, naming a successor trustee to oversee the management and administration of your trust, or nominating a conservator to manage the financial affairs of your minor children. 

MYTH #6: “If I die without a will, all my assets will go to the government.”

Under Michigan’s laws of intestate succession, the contents of an intestate estate only escheat to the government in very limited circumstances — namely, if you are not survived by any legal heirs. 

However, it is true that if you do not create a plan to determine how your properties and assets will be handled in the event of your passing, then the state will make many important decisions for you. This takes away your control. Having an up-to-date and thorough estate plan helps ensure that the people and properties you care about will be handled in the manner that you decide. Meanwhile, having a plan in place can help streamline and simplify things for your loved ones. The probate court is not a comfortable setting for handling an estate. Failing to create a plan can make this time even more long and arduous for your loved ones, who are already dealing with the emotions and stress of losing someone dear. 

MYTH #7: “Setting up a trust means giving up control of my assets.”

Does creating a trust mean giving up control? Not if you don’t want it to. There are many different types of trusts that can be used here in Michigan, depending on your unique goals. 

Generally speaking, with one of the most common and popular types of trusts, you will be able to maintain control of your assets for as long as possible. 

In an inter-vivos or revocable living trust, the trustee controls the assets. One of the practicalities of creating such a trust is that you can typically assign yourself as the trustee. This way, you remain in complete control of your trust assets. In the event that you can no longer perform your duties, the responsibilities would legally be granted to the successor trustee you’ve named. 

Get Real Answers from Michigan’s Probate and Estate Planning Attorneys

When it is time to take care of your estate planning needs, get the answers, insight, and guidance you and your beneficiaries deserve. Whether you are trying to avoid probate with a trust, want to make sure your assets are protected and transferred according to your wishes, or want to plan for incapacity with powers of attorney, our attorneys can help you custom tailor a solution to suit your needs.

At the Patrick & Associates, PLLC., we put our legal experience and skills together with our commitment to excellence in representing your rights. You can depend on our law firm’s ability to listen to you and our talent for creative strategies as we help you navigate estate planning and probate, including (but not limited to) general probate litigation, will and trust contests, beneficiary disputes, guardianships, and conservatorships. 

Our goal is to provide you with only the best professional legal services available in Michigan. Work with us and you have our sincere promise to carefully plan and manage each and every step of your legal matter from start to finish.

Have any questions? Ready to get started? Our staff is available 24/7 to help you with your legal matters. Contact Dean E. Patrick at his Southfield office at (248) 663-2566, or click here to arrange your initial consultation. 

This post has been prepared for general information purposes only. The information you obtain here is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and electronic mail.  Accessing the content of this site does not create an attorney-client relationship.  Nor, does contacting us create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

In estate planning, mechanisms such as wills and trusts can help guide and direct your assets after you pass away. What happens if you become incapacitated due to an accident or illness, and are unable to make or communicate about important decisions while you’re still alive? That’s where incapacity planning comes in. 

It is never enjoyable to think about what would happen if you were to sustain a major injury or succumb to an illness. But while it may not be fun, it is necessary to take action while you still have the chance — and help ensure that your affairs will be handled in the way you would want. A power of attorney can empower you to do just that. 

What Is a Power of Attorney — and Why Are They So Important?

Black’s Law Dictionary defines a power of attorney, broadly, as: 

An instrument authorizing a person to act as the agent or attorney-in-fact of the person granting it. 

Powers of attorney are most commonly used to ensure that someone you trust manages your financial and health care decisions when you can no longer do so on your own. A power of attorney that allows your agent to act even if you become incapacitated is known as a durable power of attorney. 

This important mechanism is useful for anyone who: 

• Wishes to be proactive, and take precautions to make potentially difficult or uncertain situations easier
• Wants to make sure that trustworthy and reliable individuals of their choosing are empowered to handle their financial, health care, and end of life decisions — rather than a court-appointed guardian or conservator
• Wants assurance that their wishes will be followed when they are unable to carry them out for themselves
• Seeks to provide comfort and peace of mind for themselves and their loved ones
• Wants to minimize the risk for disagreements or conflicts among family members 
• Wishes to keep their financial, personal, and medical affairs private 
• Wants to keep themselves, and their loved ones, out of the complex and costly living probate system

Without a power of attorney, your loved ones’ hands may be tied in a difficult moment. They may not be able to sell property, make business decisions, gain access to funds, or manage investments — making an already tough moment even harder to navigate.

Broadly speaking, if you become incapacitated without a durable power of attorney or a similar mechanism in place, the courts will often be forced to step in and appoint someone to handle your financial and medical decisions — a process known as living probate. This process can be slow, uncomfortable, and expensive. It can also put different family members at odds with one another. 

Meanwhile, it’s important to remember that without a power of attorney, you are giving up control over who will ultimately make important decisions on your behalf. Indeed, the court may appoint someone to act as your guardian or conservator that you would not have chosen for yourself. What if a family member you do not trust is appointed to this important role? What if you want different parties executing your medical and financial decisions? 

Different Types of Power of Attorney

There are several types of power of attorney documents, each designed to give a chosen agent different levels of control over your medical and/or financial decisions. 

Broadly speaking, the three types of power of attorney most frequently used in Michigan estate and incapacity planning include: 

• Durable power of attorney for financial matters.This is a legal document that gives the agent of your choice the right to handle your financial affairs if you become incapacitated, including transferring assets into a trust, pursuing claims or actions on your behalf, managing business affairs, selling property, and more.
• Durable power of attorney for health care. This is a legal document that gives someone of your choosing the right to handle your health care decisions if you become incapacitated, including treatments and end-of-life decisions. This person is known as an agent or advocate. 
• Durable power of attorney for mental health matters. Similar to a power of attorney for health care, this names an advocate to handle your mental health care decisions if you become incapacitated. A patient advocate is obligated to act in your best interest and take reasonable steps to follow all of your expressed desires, preferences, and instructions relating to your care.

Among these types of powers of attorney, there are other important factors to keep in mind. First and foremost, there is the aforementioned question of whether or not a power of attorney is durable. A “durable” power of attorney is set up in such a way that someone may act on your behalf if you become incapacitated. Some types of power of attorney are set up to be non-durable, meaning that they cease to have an effect if the principal becomes incapacitated. 

These tools are most often used in situations in which the principal needs someone to act on their behalf for a specific purpose — for example, if they are traveling and unable to attend an appointment, or if they need to authorize an attorney to sign paperwork for them during a transaction. 

Meanwhile, it’s important to consider whether an agent’s powers will be broad, or more restricted. A general power of attorney typically grants the agent broad or extensive decision-making authority, while a limited or special power of attorney narrows their scope — perhaps to specific assets or legal decisions, depending on the circumstances. 

The Importance of Talking With an Experienced Legal Professional

Powers of attorney are important tools, which can empower you to safeguard your assets, protect your privacy, and maintain control over pressing financial, health care, and end of life decisions. With that said, they can be complicated, and difficult to understand alone. 

That’s why it’s so important to consult with an experienced estates and probate attorney, such as our very own Dean E. Patrick. 

Dean can help you navigate this process from beginning to end, from understanding all of your options to nominating an agent to help you when you’re in need. If you currently have a power of attorney and are unsure if your document can be classified as durable, Mr. Patrick can help review your current situation during your consultation initial consultation.

While we all hope we don’t need to use the insurance we pay for, we are glad it’s there when we need it. There are no good excuses for an adult to be without financial and health care power of attorney. 

Ready to put some protections in place? We are here for you. Our skilled law firm is here and ready to assist with all of your incapacity planning and probate needs, including powers of attorney.

At the Patrick & Associates, PLLC., we will work hard to accomplish your goals, while handling your matter with professionalism and expertise. Mr. Patrick can help you navigate through all the legalities and formalities, so that you can rest assured that you and your loved ones will be taken care of, whatever life brings. Don’t hesitate to call our Southfield, Michigan office at (248) 663-2566 to set up your initial consultation. You may also click here to get in touch online.

This post has been prepared for general information purposes only. The information you obtain here is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and electronic mail.  Accessing the content of this site does not create an attorney-client relationship.  Nor, does contacting us create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

For many families, the responsibility for managing an elderly parent’s finances often falls to members of the “Sandwich Generation” — that is, their adult children, many of whom juggle senior care while raising kids of their own at the same time. 

If you are considering stepping in and helping an elderly loved one to take care of their bills and expenses, it is important to understand all of the crucial steps you must take — and all of the mechanisms available to help you protect your loved one and empower them to maintain control, should they ever become incapacitated and unable to handle their own affairs. 

Should you find yourself in a position where you must take action to manage an aging parent’s bills, expenses, and assets, know that you are not alone. 

Many older adults find it more difficult to manage money and financial matters over time, for any number of reasons. Physical restrictions, for example, can make it harder for elderly adults to access their safety deposit boxes, maintain their real estate investments, or even sign checks. Memory loss, dementia, and other cognitive changes can affect a senior’s ability to handle financial matters and communicate effectively with family members or advisors. Many older adults may have been dependent on a spouse to handle the family finances, and find themselves unable to keep up now that they’re gone. Others find themselves coping with health challenges that can make it hard to stay current on their bills — while adding to their expenses, each and every day.

What’s more, financial security experts agree that older adults are uniquely vulnerable to financial abuse or manipulation. In fact, one report cited by CNBC suggests that senior citizens collectively lose more than $3 billion a year to scams and fraud. 

For older adults, the consequences of mismanaging one’s finances could be significant, even beyond the very real risk of falling victim to fraud or undue influence. Failing to keep up with mortgage or rent payments could result in foreclosure or eviction. Forgetting to pay the utility bills could result in losing access to heat or power. Reckless spending may cause seniors to lose their nest eggs, or permanently damage their credit.

Talking About Finances With a Senior Loved One: Getting the Conversation Started

Many older adults expect to turn to their adult children for assistance with handling financial matters. However, studies suggest that there may be somewhat of a breakdown when it comes to communication on these important topics. 

A 2016 study published by the financial services firm Fidelity, for instance, found that 69 percent of parents expect one of their children to “help manage their investments and retirement finances” — yet “more than one-third (36 percent) of the kids identified as filling this role didn’t know this.“

The same study found that 34 percent of parents have not had “detailed conversations” about their living expenses in retirement — while another 16 percent “have not had any conversations on the topic at all.”

As a loving and concerned family member, it may fall to you to take action and move these crucial discussions forward. As with conversations around estate planning, probate, and other sensitive life topics, it may help to start these conversations early — that is, before you and your parents face an emergency or crisis that requires quick action. As much as possible, work with your parents, and be patient and empathetic to their needs and concerns. Don’t expect to handle all of these weighty topics in one go. Many people also find it beneficial to begin more casually, and enter into these big conversations by starting small — by, say, focusing on a recent news story, or talking about a situation faced by a family friend or relative. 

In other cases, it may help to bring in an outside mediator. An experienced and trusted attorney, for instance, can help you advance the conversation while addressing everyone’s concerns and helping you to gain a better understanding of the many courses of action available based on your unique situation. 

Of course, there may also be a time when adult children “need to be more hands-on,” as Eileen Ambrose and Sandra Block once noted in an article for Kiplinger. This may include getting to know your parents’ financial advisors, while also taking steps to learn more about their assets “and how they have been spending money” — such as helping your parents to review their monthly bills, credit card statements, insurance policies, benefit plans, and other financial records. 

Taking time to perform this oversight may result in you noticing some red flags that something is amiss — such as your parent regularly missing important bill payments, or racking up unusual charges on their bank or credit card statements. If an elderly loved one is unable to talk about their finances, explain their decisions, or keep track of different accounts and records, this could also be an indicator that additional help is warranted. 

Managing a Sick or Aging Parent’s Finances

Whether your loved one simply needs an extra set of eyes to safeguard their financial well-being, or requires more significant intervention to protect their finances, it’s important to have an understanding of all of the options and legal mechanisms available.

In some cases, older adults may prefer an arrangement that empowers a trusted family member to help out, such as creating a joint bank or credit card account. As the AARP notes, this is often one of the “easiest” ways “to pay a loved one’s bills and keep track of expenses:”

If your loved one is in the early days of a progressive disease such as dementia or amyotrophic lateral sclerosis (ALS), having a second person on the account is essential. When needed, that person can step in as a money manager to pay bills, make deposits and withdrawals, and monitor the balance to make sure your loved one is not being scammed or financially exploited.

However, this arrangement is not without risks. If an untrustworthy person is granted account access, they could easily steal from the senior. This situation may also open up family members to the responsibility of having to deal directly with creditors, and creating the arrangement could contribute to family discord and disagreements.

Oftentimes, a family member’s options to interface with financial institutions or help a senior parent or loved one manage their finances can be quite limited unless the child is made a fiduciary — that is, someone who is authorized to act on behalf of their parent. A fiduciary is held to a high legal standard of conduct, and is expected to act fairly and put the needs of the individual and their estate above their own. 

For Michigan families, there are many different courses of action and legal mechanisms to consider based on your specific situation, including: 

Powers of Attorney

A power of attorney for financial matters is a legal document that gives someone of your choosing (known as the agent or attorney-in-fact) the right to handle your financial affairs. A durable power of attorney allows this authority to remain in place should you ever become incapacitated — meaning that you do not need to give up control of your affairs while you still have the capability to manage them, but can sleep well knowing you have a plan in place in case you do not.

Creating a power of attorney does not require the involvement of the court. As long as you are of sound mind and body, you can execute a valid durable power of attorney by signing the document in front of a notary or two witnesses. Powers of attorney can be quite broad or limited in scope, depending on the circumstances. In addition to planning for incapacity, older adults may consider using powers of attorney to grant a trusted loved one the ability to deal with a specific account, access their financial records, pursue claims or actions on their behalf, or handle a specific financial transaction when they cannot manage it on their own. 

Trusts

A trust is a written agreement which names an individual who is responsible for managing select property and assets, as directed by a trust agreement. This person is known as the trustee; the person who creates the trust is known as the settlor or grantor. 

There are many different types of trusts, designed for any number of different circumstances. Broadly speaking, once a trust is created, the settlor must retitle their chosen assets into it — this could include investments and securities, tangible personal property, bank accounts, business interests, and real estate.

One of the most popular and common types of trusts used in Michigan is the revocable living trust. Also known as an inter vivos trust, this type of trust can be filled, modified, or revoked as long as the grantor is of sound mind. Most commonly, the grantor will name themselves as the trustee, in order to maintain control over the trust assets for as long as they are able to do so. Should the settlor ever become unable to perform their duties as trustee due to incapacity or death, a successor trustee would be granted the legal responsibility of managing the trust assets. 

In other cases, an older adult may choose to name a trusted family member or professional fiduciary as the trustee immediately, in order to give them the power to control, maintain, and distribute the trust assets. For example, this could allow an adult child to assume the responsibility for managing investments or selling real property placed into the trust, ensuring that any relevant transactions are able to move forward.

Conservatorship

A conservator is a person appointed by a court to manage the assets, property, and finances of a protected individual. Conservatorships are established when a court determines that an individual can no longer effectively manage his or her own property and financial decisions for reasons such as “mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, confinement, detention by a foreign power, or disappearance.” The court must also find that: 

the individual has property that will be wasted or dissipated unless proper management is provided, or money is needed for the individual’s support, care, and welfare or for those entitled to the individual’s support, and that protection is necessary to obtain or provide money.

In order for a conservator to be appointed, a petitioner must file with the probate court. The court will then investigate the facts of the situation, and a hearing will be held to determine if a conservatorship will be necessary, and, if so, to select a suitable conservator who will be willing and able to serve. 

Anyone interested in an individual’s estate, affairs, or welfare may petition for conservatorship; An individual can also request the appointment of a conservator for themselves, if they recognize that they are unable to manage their property and affairs effectively due to age or physical infirmity. When considering the need for a conservatorship, the courts will consider if the individual has any other alternative solutions in place, such as a durable power of attorney. Establishing a conservatorship can be complex, time intensive, and may open the door to heated family disagreements and litigation. Bear in mind that the decision to appoint a conservator for an individual is a very serious matter, since, ultimately, the Michigan probate court will take away some of the individual’s basic rights. 

Guardianship

If an aging parent has become incapacitated and unable to take care of their basic needs, a guardianship may also be considered. 

Broadly speaking, a guardian is a substitute decision-maker for an incapacitated individual (known as the “ward”). Guardians are responsible for looking out for the general well-being and care of their ward. Whereas a conservator is responsible for the care and preservation of all the individual’s assets and property, a guardian is broadly responsible for making medical, housing, and other personal decisions for them. This might include providing suitable food and clothing; providing shelter and determining where the individual lives; applying for specialized services on their behalf; and authorizing or refusing medical care.

As with a conservatorship, establishing a guardianship requires going before the probate court. In order for a guardian to be appointed, a concerned individual must file a petition explaining why the guardianship is needed. A hearing is then held to consider the request, and a judge will determine whether or not a guardianship is needed, who will serve as guardian, and what powers the guardian will have. 

Depending on the specific needs of the ward, a guardian’s powers can be quite broad or fairly limited. Michigan law is designed to “encourage the development of maximum self-reliance and independence in the individual,” and allows for guardianships to be closely tailored to the individual’s unique situation. Accordingly, Michigan’s Estates and Protected Individuals Code (EPIC) states that “the court shall grant a guardian only those powers and only for that period of time as is necessary to provide for the demonstrated need of the incapacitated individual.” A court order establishing a guardianship must also specify “any limitations on the guardian’s powers and any time limits on the guardianship.”

You Don’t Need to Face These Complex Decisions Alone

If you are one of the millions of people here in Michigan and around the country acting as a caregiver for an aging parent, it is important to understand all of your options and find a workable path forward. 

There are many personal factors and pressing decisions involved when it comes to assuring that your loved one’s finances will be managed, their well-being taken care of, and their wishes carried out when they can no longer make or communicate informed financial decisions for themselves.

Talking with an experienced attorney is a crucial first step to protecting your loved ones. A knowledgeable estate and probate attorney can help you get a handle on the specifics of your unique circumstances, consider all of the courses of action available to you and your family, and prepare in advance for any potential complications or difficulties that may arise.

We’re Here to Help You Protect the Important Things

Interested in discussing incapacity planning for yourself or a loved one? Do you have questions about any type of estate planning tool or technique? Ready to start getting a handle on the specifics of your unique situation? 

At the Patrick & Associates, PLLC., we put our legal experience and skills together with our commitment to excellence in representing your rights. You can depend on our law firm’s ability to listen to you and our talent for creative strategies.

You and your family can rest assured knowing that our office is handling your matter with professionalism and expertise. Our meeting schedules are flexible in order to accommodate your needs and we work hard to discuss these difficult matters in terms that are easy to comprehend. Our office is conveniently located in Southfield, Michigan and our staff is available 24 hours a day, 7 days a week to receive phone calls and help you with your legal matters.

If you have any more questions or are looking for representation as you navigate Michigan’s tricky probate court system, don’t hesitate to contact our office at (248) 663-2566 to set up your initial consultation. You may also click here to get in touch online.

This post has been prepared for general information purposes only. The information you obtain here is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and electronic mail.  Accessing the content of this site does not create an attorney-client relationship.  Nor, does contacting us create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

What would you do if you found yourself in a position in which you needed to act on behalf of an incapacitated spouse, parent, or sibling — or required someone trustworthy to carry out your wishes and manage your affairs? To navigate these tricky situations with confidence and peace of mind, it’s crucial to understand some key concepts, including guardianship, conservatorship, and powers of attorney.

Looking to the Future

Planning for the future can be intimidating, even downright scary. While it’s never fun to think about what might happen if you or someone you love were to sustain a major injury or succumb to illness, it is a necessary step — and one that can make difficult situations much easier to manage down the line for you and your loved ones.

Considering the best path for managing your affairs if you become gravely ill or incapacitated? There are several important precautions you can take to help ensure that your wishes are respected and carried out efficiently, in a way that protects your family’s privacy, maintains family control, and helps you attain your most important goals.

Similarly, if you are one of the millions of people here in Michigan and around the country caring for an aging parent or spouse, you may be wondering about the best way to ensure that their finances will be managed, their well-being taken care of, and their wishes carried out when they can no longer make or communicate informed decisions for themselves.

Whether you are planning for your own future or looking to help out a loved one who cannot take care of themselves, it is important to understand the mechanisms that may come into play — including guardianship, conservatorship, and powers of attorney.

As you look forward, it’s particularly crucial to understand what sets powers of attorney apart from guardianship and conservatorship. With this knowledge, you can get a better grasp on all of your options and find the course of action that will be suited to your unique circumstances.

Guardianship

When an individual cannot make or communicate informed general care decisions for themselves, a guardianship may be established through the probate court.

Broadly speaking, a guardian is a substitute decision-maker for an incapacitated individual (known as the “ward”). Guardians are responsible for looking out for the general well-being and care of their ward, as necessary.

Depending on the specific needs of the ward, a guardian’s powers can be quite broad or fairly limited. Michigan law is designed to “encourage the development of maximum self-reliance and independence in the individual,” and allows for guardianships to be closely tailored to the individual’s unique situation.

Accordingly, Michigan’s Estates and Protected Individuals Code (EPIC) states that “the court shall grant a guardian only those powers and only for that period of time as is necessary to provide for the demonstrated need of the incapacitated individual.” A court order establishing a guardianship must also specify “any limitations on the guardian’s powers and any time limits on the guardianship.”

Depending on the powers granted by the court, a guardian generally has the responsibility to provide for the individual’s care and comfort, including providing suitable food, clothing, and shelter. Guardians may also determine where another individual lives, apply for and obtain services on their behalf, and authorize or refuse medical treatments, unless other provisions are made (such as a patient advocate designation in a durable power of attorney for health care).

Keep in mind that guardianship is a legal process, which requires going before the probate court. In order for a guardian to be appointed, a concerned individual — which could be the incapacitated individual, or any person interested in their welfare, such as family member (or in some awful cases, the management of a nursing home that just wants to get their patient qualified for Medicaid to pay their bill) — must file a petition, explaining why the guardianship is needed.

After this, a hearing is held to consider the request, and a judge will determine whether or not a guardianship is needed, who will serve as guardian, and what powers the guardian will have. A hearing can be contested if the incapacitated individual does not want or agree to the guardianship, or if there are concerns or disagreements about who should serve as guardian.

Conservatorship

Broadly speaking, a conservator is a person appointed by a court to manage a protected individual’s estate and finances. Conservatorships are established when an individual can no longer effectively manage his or her own property and financial decisions.

Whereas a guardian is broadly responsible for making medical, housing, and other personal decisions about the person, the conservator is responsible for the care and preservation of all the individual’s assets and property. The same individual can be appointed to serve as guardian and conservator, or these roles can be delegated to two different parties.

As with guardians, conservators must be appointed through the courts. In order for a conservator to be appointed, a petitioner must file with the probate court. The court will then investigate the facts of the situation, and a hearing will be held to determine if a conservatorship will be necessary, and, if so, to select a suitable conservator who will be willing and able to serve.

In order for a conservator to be appointed, the court must find that the individual is unable to manage property and business affairs effectively for reasons such as “mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, confinement, detention by a foreign power, or disappearance, and that

the individual has property that will be wasted or dissipated unless proper management is provided, or money is needed for the individual’s support, care, and welfare or for those entitled to the individual’s support, and that protection is necessary to obtain or provide money.

Anyone interested in an individual’s estate, affairs, or welfare may petition for conservatorship, along with anyone who may be negatively affected by ineffective management of the individual’s property. An individual can also request the appointment of a conservator for themselves, if they recognize that they are unable to manage their property and affairs effectively due to age or physical infirmity.

Powers of Attorney (POA)

Broadly speaking, a power of attorney is a written instrument that gives legal authority to a third party (known as the “agent” or “attorney in fact”) to act on the behalf of someone else (known as the “principal”). In estate planning, power of attorney (POA) is a tool that can be used to ensure that someone you trust manages your financial and health care decisions when you no longer can.

With powers of attorney, you can exert a great deal of control over your chosen agent, granting them broad power to make decisions on your behalf, or limiting their scope to only a few pressing matters.

When you’re considering your future or thinking about estate planning, it is imperative that the power of attorney used can be classified as a “durable” power of attorney. A durable POA contains specific language that ensures your agent can act even if you become incapacitated, while keeping the power in your hands for as long you can make decisions for yourself.

In Michigan estate planning, there are several important types of powers of attorney to know, including:

• Durable Power of Attorney for Finance. This is a legal document that gives the agent of your choice the right to handle your financial affairs if you become incapacitated, including transferring assets into a trust, pursuing claims or actions on your behalf, managing business affairs, selling property, and more.
• Durable Power of Attorney for Health Care. This is a legal document that gives someone of your choosing the right to handle your health care decisions if you become incapacitated, including treatments and end-of-life decisions. This person is known as an agent or patient advocate. A durable power of attorney for mental health, similarly, names an advocate to handle your mental health care decisions if you become incapacitated. A patient advocate is obligated to act in your best interest and take reasonable steps to follow all of your expressed desires, preferences, and instructions relating to your care.

Creating powers of attorney does not require the involvement of the court. As long as you are of sound mind and body, you can execute a valid durable power of attorney by signing the document in front of a notary or two witnesses. If you want to keep the courts and public out of your business, powers of attorney are most likely right for you.

Guardianship V. Conservatorship V. POA: Key Points to Consider

Now that we’ve discussed the basics behind guardianship, conservatorship, and powers of attorney, we can explore their unique potential advantages and disadvantages — and how these different elements may fit into an overall estate plan.

Whether you are taking steps to prepare for your own future, or have concerns about a family member’s ability to make important financial and personal decisions down the line, it is highly important to create powers of attorney while you are able to do so.

A power of attorney grants you a significant level of control over who will make decisions on your behalf should you become incapacitated, without having to go to the courts. Powers of attorney also give you significant control over the scope of the action that your agent or advocate can take. Because they can be handled without a judge, powers of attorney can help safeguard your privacy, while saving you and your loved ones a significant amount of time and effort.

Significantly, powers of attorney can also help guide a court’s decision on guardianship and conservatorship hearings. When considering the need for guardianship or conservatorship, the court must consider whether there are appropriate alternatives to the appointment of a guardian or conservator such as valid patient advocate designations, do-not-resuscitate orders, physician orders for scope of treatment form, or durable power of attorney with or without limitations on purpose, authority, or duration.

Importantly, a principal may also use a durable power of attorney to nominate a guardian for consideration by the court. This approach gives an individual the ability to nominate who they would want as guardian or conservator instead of leaving it to the court and Michigan Law.

When appointing a guardian, the court makes selection in a certain order of priority, with preference going to a person chosen by the individual, or a person nominated as guardian in a durable power of attorney or named as a patient advocate.   With proper planning, this order of priority can be altered as you see fit.  Perhaps you have a friend who is better suited than a family member (or no family at all) to handle these important decisions.

If no person is chosen, nominated, or named, however, the role of guardian may fall to the individual’s spouse, adult child, or another relative. Ultimately, if no one from the incapacitated individual’s family is willing or suitable to serve, the responsibility may go to a person nominated by the petitioner, or a professional guardian chosen by the court.

A similar process occurs with conservatorships, with priority to serve granted to an individual or corporation nominated by the protected individual, including a nomination made in a durable power of attorney, followed next by the individual’s spouse, adult children, and relatives. With conservatorships, a person nominated may also designate a substitute to serve in their stead, subject to approval by the court. The court may also appoint a professional conservator if no one else is willing or suitable to serve.

A power of attorney, then, is a way to help ensure that someone you know and trust will be empowered to handle your financial or health care decisions — not a court-appointed guardian or conservator. If you do not take control when you can, you are leaving some incredibly important decisions up to the courts. Think of powers of attorney as a form of insurance. While we all hope we don’t need to use the insurance we pay for, we are glad it’s there when we need it. You do not give up control of your affairs while you still have the capability to manage them, but can sleep well knowing you have a plan in place in case you do not.

Finally, it’s important to remember that even under the best of circumstances, the legal proceedings around guardianship and conservatorship can be complex and time-intensive for everyone involved. These matters are highly emotional and the rules involved can be confusing and difficult to navigate — particularly when questions or disputes arise.

The decision to appoint a conservator or guardian for an individual is a very serious matter, since, ultimately, the Michigan probate court will take away basic rights from an individual. It is intrusive by nature and comes with long-term duties and responsibilities — and is not something to be taken lightly.

Keep the Discussion Going with Metro Detroit’s Probate and Guardianship Attorneys

Interested in learning more about guardianship and conservatorship in Michigan?  Ready to start preparing for the future, and take control over who will make important decisions in the event that you become incapacitated?

For all these important matters and more, it’s wise to have an intelligent and experienced lawyer at your side, fighting for your rights and the well-being of your loved ones.

Our skilled law firm is here and ready to assist with all of your incapacity planning and probate needs, including guardianships, conservatorships, and powers of attorney.

If you require further legal advice or if you are looking for representation as you navigate Michigan’s tricky probate court system, don’t hesitate to call our Southfield, Michigan office at (248) 663-2566 to set up your consultation initial consultation. You may also click here to get in touch online.

The probate attorneys at Patrick & Associates, PLLC will work hard to accomplish your goals, while handling your matter with professionalism and expertise. Mr. Patrick can help you navigate through all the legalities and formalities, so that you can rest assured that you and your loved ones will be taken care of, whatever life brings.