By Jehan Gibson-Crump
A common misconception is that estate planning only applies to death. This could not be further from the truth. A proper estate plan determines what will happen with your assets if you pass away and who will be responsible for carrying out those wishes. It also puts measures in place to determine who will manage your affairs if you are unable, whether it is on a temporary or permanent basis. This is done through Healthcare Powers of Attorney and Financial Powers of Attorney. If done properly, these legal documents can help avoid probate court for Guardianship and Conservatorship proceedings.
“Guardianship” is a court-ordered arrangement that gives a person (the guardian) the authority to manage the personal activities or affairs of someone the court has determined unable to make or communicate informed decisions (e.g. healthcare decisions, placement decisions, etc.). “Conservatorship” is a court-ordered arrangement that gives a person (the conservator) the authority to manage the financial affairs of someone the court has determined is unable to do so for themselves. These court proceedings are public and can be lengthy and stressful. In most cases, these proceedings are started because a person does not have Powers of Attorney. This means that most Guardianships and Conservatorships can be avoided.
So, who needs Powers of Attorney? My rule of thumb is that any adult age 18 and up needs them. Unless the proper legal documentation is signed, no one is entitled to access or manage another adult’s private health or financial information. There is no exception for a spouse, parent, sibling, or the first-born or favorite child. In the absence of a medical situation where urgent life-saving procedures need to be taken, spouses, parents and adult children often find themselves applying for Guardianship to make healthcare decisions for their loved one when there is no valid Healthcare Power of Attorney. In situations where financial accounts are in a person’s name alone and they become unable to handle their affairs, a loved one will not be allowed access, in the absence of a valid Financial Power of Attorney or proof of Conservatorship from a probate court.
Let’s take 23-year-old Tamara. Tamara has a good job with an insurance company and is by all accounts healthy. She is not married and has not thought twice about Powers of Attorney. Tamara is driving home one day when a reckless driver runs a red light and hits her car. She is rushed to the hospital and placed on a ventilator. Her mother Gloria rushes to her side and prays without ceasing. Thankfully, after a couple of weeks, Tamara slowly begins to improve and is taken off the ventilator but due to the catastrophic injuries she sustained, she must be transferred to a rehabilitation facility to continue recovery. There is a long road ahead. After she identifies a rehabilitation facility that will take Tamara’s insurance, Gloria is asked for a Healthcare Power of Attorney or Letter of Guardianship to process the placement. She is floored. This is her child, and Mama Bear should be able to make these decisions with no questions asked! Unfortunately, the law does not agree—which the facility knows. They want reassurance that they are legally protected if they allow Gloria to sign all the paperwork.
Gloria also recognizes that Tamara’s bills still need to be paid, even though she is unable to handle them herself. Gloria goes to Tamara’s credit union to access funds to pay her rent and utilities. The manager immediately shuts her down and tells her to come back with a Financial Power of Attorney or proof of Conservatorship. Tamara is in no condition to sign any Powers of Attorney. She has not improved that much to have sound mind to do so. This means that Gloria is taking a trip to probate court before she can finish processing Tamara’s placement and access her accounts to pay bills. Can you imagine the unnecessary stress on top of everything else that is going on? Additionally, Gloria has no clue what she is doing and is too overwhelmed to figure the process out on her own, so now she must pay a lawyer to assist her.
As you can see, age is nothing but a number when it comes to these situations. This is why every adult needs Powers of Attorney. Even more, every adult needs to have these done while they are still of sound mind. Sound mind is an everyday term for capacity. If you do not have the capacity to make out these documents, it is too late. This is when someone must go to probate court to be appointed over your affairs. Having capacity means that you understand and appreciate that the documents you sign give another person the power to make decisions for you, what kinds of decisions they will be able to make and how this can impact you and your property. Certain illnesses, injuries and sometimes age can have a direct impact on capacity.
Powers of Attorney not only help avoid probate court but also ensure that the person you want to handle your affairs will be able to do so. You can cancel or change these documents at any time if you have capacity. No one can make out a Power of Attorney for you, no matter how badly you need help. This is why so many people wind up in probate court after it is too late. The power is only yours to give, and it is in your hands. Don’t leave things to chance. Act today!
Attorney Jehan Crump-Gibson is the Co-Founder and Managing Partner at Great Lakes Legal Group PLLC, where she concentrates her practice in probate and estate planning, business and real estate matters. Great Lakes Legal Group is a growing black-owned law firm serving clients throughout the state of Michigan and in federal courts across the country. Jehan has served as Faculty for the National Business Institute and the Institute of Continuing Legal Education concerning business, probate and estate planning matters. She is a legal analyst with Fox2 Detroit’s The Noon and the author of the book A Matter of Life and Death.
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