Medical and General Durable Powers of Attorney

Dec 2018


Dear Rick:
I always find your articles to be very helpful. I write in regards to a recent article outlining estate planning; I have a few questions.
1) Can the two documents regarding the legal and medical powers of attorney be included in a will, or are they separate documents which stand alone?
2) My oldest daughter is 25 and very irresponsible with money and is carrying a large debt. If I name her as a durable power of attorney, am I responsible for her debt?
Thank you.

Dear Anna:
Thank you for reading my column; I very much appreciate it. In regards to your situation, the medical durable power of attorney and a general durable power of attorney are separate and distinct documents and are separate from the will. Both of these powers of attorney are documents that are effective while someone is living, but they terminate upon death. On the other hand, a will is the exact opposite. A will doesn’t take effect until after someone passes away. Therefore, when you look at the documents, the powers of attorney are valid and effective during someone’s lifetime, while the will is only affective after someone passes away.
With regards to wills, medical durable power of attorney and general durable power of attorney, I cannot stress enough how important these documents are. I believe the more you keep judges, courts and lawyers out of family affairs the better life is. The best way to accomplish this is to make sure you have the proper legal documents. Therefore, if you’re an adult in Michigan, you need the aforementioned three documents.

With regards to your 25-year-old daughter, if you name her as your power of attorney, you are not assuming any responsibility for her debt. In addition, her creditors could not come after you or your assets for her liabilities. However, the bigger question is should you be naming your daughter as your power of attorney. The person you appoint as your power of attorney is not only someone that you trust and you know will operate in your best interest, but will also be a person who takes over your financial affairs. If you older daughter is irresponsible with money, is that the type of person that you should give a power of attorney to?

I recognize in most situations it makes sense to give adult children the power to handle your affairs if you are unable to do so. However, the one question you have to ask yourself, and you have to be honest with yourself, and that is, is your child fiscally responsible enough to handle your affairs. If a child can’t handle their own affairs, it probably is a sign that they cannot handle yours. Therefore, in the situation where you do have an adult child that is somewhat fiscally irresponsible, it may make sense to not name them as power of attorney, or to provide a check and balance system by naming them and someone else as co-power of attorneys.

It is important to remember when you name someone as your durable power of attorney they have an incredible amount of power over your finances. Someone doesn’t have to be an expert in personal finance, but you want them, at a minimum, to at least be responsible with money. After all, if they are irresponsible with their own money there is a very good chance that they are going to be irresponsible with your money. Therefore, you shouldn’t just automatically name a child to be your power of attorney, but rather you need to ask yourself if your child has the skills to take over that very important responsibility. If they don’t, it is important to admit it to yourself and look for someone else. After all, if they are fiscally irresponsible with your money it could cause you severe problems.

Good luck!


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