At one time, power of attorney was less commonplace, but it has risen in popularity. Many people automatically think of a power of attorney as being the primary solution to protecting an incapacitated person. However, it does not have unlimited power under Michigan law, and if the person drafting the document fails to include detailed instructions, making such arrangements can have negative consequences for that individual and his or her family.
One recent Connecticut case involving mental capacity helped raise awareness of the limitations of the documents. In that case, a man drafted a will, power of attorney and healthcare proxy in an effort to make things easier for his sisters. When the power of attorney had to come into use because he developed dementia, one of his sisters had problems using it because he had drawn it up using her legal first name instead of the middle name that she had commonly gone by in adulthood.
The case is an example of how it is not uncommon for banks to deny a power of attorney. The documents have sometimes been used as a way to commit fraud, and banks have a tendency to question the validity of the tools because they fear the possible legal consequences if fraudulent activity occurs.
The different sorts of powers of attorney are helpful in estate planning, but care must be taken to ensure that they are handled properly. Many recommend using an attorney to draw up these sorts of documents. Working with an estate planning attorney might help a client and his or her family avoid problems in the future.
Source: The New York Times, "Power of Attorney Is Not Always a Solution", Paul Sullivan, August 22, 2014