Yes. A Durable Power of Attorney allows its maker to appoint another individual to act on his or her behalf. Essentially, the maker of a power of attorney can delegate to his agent any power he or she possesses personally.

The term “Durable” signifies that the power being granted continues to be effective despite the disability of the maker. Since the likelihood of becoming incompetent increase dramatically as we age, it is important that we appoint trusted family members or friends to handle our affairs in the event that we are unable to act on our own behalf. Absent proper planning, the affairs of an incompetent come within the jurisdiction of the Probate Court.

A family member or other “interested party” would be required to petition the Probate Court to have the individual declared incompetent, and to have a Guardian and Conservator appointed. Durable Powers of Attorney (DPOA) have become a critical estate planning component in order to avoid costly Probate Court proceedings.

Durable Powers of Attorney can be broken into two broad categories: General Durable Powers and Durable Powers for Health Care.

DURABLE POWERS OF ATTORNEY

Under a General Durable Power of Attorney (DPOA), the maker appoints an agent to handle all of his or her personal business, including banking, preparation and filing of tax returns, sale of motor vehicles, application for Social Security and governmental benefits, all as if the maker were himself or herself present. Depending on the level of trust the maker has in his or her agent, a DPOA can be effective either as of its execution or upon the maker’s disability (a “springing power”). Naturally, there is a much greater potential for misuse where the DPOA is effective upon signing. For this reason, the author typically recommends springing DPOAs.

A DPOA grants to the agent the power to handle all of the maker’s personal affairs. The power of the agent does not extend to assets owned by the maker’s Revocable Living Trust. Assets owned by the maker’s Revocable Living Trust are not considered the maker’s personal assets. The Revocable Living Trust itself addresses the issue of the disability by appointing a Successor Trustee upon the disability of the Grantor/initial trustee.

Under Michigan law, an agent may not make gifts without specific authorization in the document. It is important to grant the agent the power to make gifts in cases where the maker has commenced an annual gifting program for the purpose of reducing his or her taxable estate. See Q16. Absent the specific power to gift, the gifting program would be stalled by the disability of the donor. The power to gift may also be important for Medicaid planning purposes. There are permitted forms of divestment which would not be available if the maker were incompetent and thus not able to transfer assets out of his or her name (See Q19).

DURABLE POWERS FOR HEALTH CARE

Advances in medical science have created a health care dilemma: How long to keep a terminally ill patients alive on life support systems? Fortunately, in late 1990, Michigan law was changed to allow for the appointment of a substituted decision maker in cases where the patient is unable to make his or her own medical decisions.

Michigan law now recognizes health care powers of attorney (“HCPOA”), which designate a “patient advocate” to make an individual’s health care decisions. The patient advocate may be given the authority to pull the plug in the event of terminal illness.

Under the new law, the authority of the patient advocate comes into effect only when the patient is unable to participate in his or her own medical treatment decisions. To preserve the patient’s right to self-determination, the law reserves unto the patient the power to make his or her own medical decisions as long as he or she is able. The determination of the patient’s ability to participate in medical decisions is to be made by the patient’s “attending physician or another physician or licensed psychologist.”

The patient advocate has the legal authority to work directly with the patient’s doctors to determine the nature and extent of the patient’s medical treatment, including decisions relating to life support system cessation. Absent a properly drafted HCPOA the legal authority to make an incompetent patient’s medical decisions can be granted only with Probate Court intervention. “Living Wills” and other informal documents are not effective for the purposes of making health care designations.

To be effective, a HCPOA must be signed in the presence of two witnesses, neither of whom are the patient’s spouse, parent, child, grandchild, sibling, heir, physician, patient advocate, or an employee of a life or health insurance provider, health facility, or a home for the aged. The HCPOA must be dated, and must contain specific language exonerating health care professionals from liability for terminating life support systems. It must also clearly state that the patient understands that a decision of the patient advocate “could or would lead to my death.” All patient advocates must sign an “Acceptance of Patient Advocate” form, agreeing to act on behalf of the patient in conformity with Michigan law. Perhaps most important of all, a HCPOA must be signed when the patient is competent.

HCPOAs executed prior to l991 are grandfathered from the technical requirements of the new law. However, for a number of reasons, pre-1991 HCPOAs should be revoked and replaced with a HCPOA valid under current law. First, physicians and hospital medical ethics boards will be very reluctant to honor HCPOAs which do not contain current language. Also, HCPOAs should be reviewed and re-executed from time to time. Even valid HCPOAs can become “stale” if many years have passed since their execution, bringing into question whether they have been revoked or revised in the intervening period. Although there is no legislatively mandated limit on validity for Michigan HCPOAs (unlike several other States which dictate how long a HCPOA will be effective), an eight year old HCPOA (pre-1991) which lacks current language should be replaced.

Since it is impossible to specifically address every medical contingency in a HCPOA, HCPOAs tend to grant the patient advocate wide discretion. It is therefore important to choose a patient advocate who understands your wishes, especially with respect to continued life support. For this reason, spouses, parents and adult children with whom the maker has a trusting relationship are the most logical choices to act as patient advocate. The author recommends empowering only one patient advocate at a time. Although it is prudent to name successor patient advocates in the event that the patient’s first choice is unable or unwilling to act, naming multiple patient advocates with concurrent power only creates the possibility for conflict. Hospitals cannot be expected to terminate life support systems when they receive conflicting instructions.

The detailed health care directive at the end of the chapter outlines a number of illnesses and the corresponding level of intervention desired by the patient. Although not used by the author in his estate planning practice, the reader may benefit from the detail provided by the form. If nothing else, the form should provoke some thought.

Recent studies have confirmed what the general public had long suspected. Health care directives, even when in writing and communicated to the physician, have been largely ignored by hospitals. For this reason, patients must be diligent in every aspect of their HCPOA. Patients must verbally communicate their thoughts and wishes concerning terminal illness and life support systems to their patient advocate. The treating physician and hospital should be aware that a HCPOA has been prepared; in some cases health care providers should be given a copy of the document. Knowing of the reluctance of hospitals and physicians to remove patients from life support systems, the patient or the patient advocate will have to be both assertive and vigilant.
It’s your right!

The Federal government recently enacted the Patient Self Determination Act, requiring all health care facilities to inform patients of their rights regarding health care decision making. There is, however, no Federal law dealing with Durable Powers of Attorney. Thus, Health Care Powers of Attorney executed in one state are not necessarily effective in other states. Accordingly, separate HCPOAs should be drafted for individuals splitting time between or among states.

Durable Powers of Attorney may be revoked as long as the maker is competent. The best way to revoke DPOAs or HCPOA is to destroy all copies of the document.

Recently, Michigan passed the “Do-Not-Resuscitate Act” to protect terminally ill patients. The product of the legislation is the “Do-Not-Resuscitate Order,” which legally prohibits EMS units and other emergency care givers from resuscitating the terminally ill home bound patient.