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Money July 2018

Legal Ease

You Really Do Need the Power of Attorney

By Jonathan J. David

In terms of personal and health care related matters, in most cases health care providers will look to you as the non-disabled spouse for the purpose of making decisions on your wife’s behalf even though she does not have a health care power of attorney naming you as her patient advocate

DEAR JONATHAN: My wife and I have been married for 50 years.  We have no children and we have no estate plan; we never saw the need.  If one of us becomes mentally impaired, doesn’t the other one automatically have the right to act on behalf of the disabled spouse?  If the answer is yes, it seems to me that we do not need to have power of attorneys.  Am I wrong?

Jonathan Says: That is a very good question and one that comes up on a regular basis.  The short answer is that even though you are married, it is still important that each of you have power of attorneys.  There are two types of matters that can be impacted by a person’s disability, financial and personal and medical care decision making.  In terms of your financial matters, if your wife, for example, suffers a disability and does not have a financial power of attorney in place, there are many things that you will not be able to do on her behalf even though you are married.  The following are some examples of what you cannot do on behalf of your disabled wife without a power of attorney: 

  • Changing the beneficiary designations on her investments, such as IRAs, annuities, and life insurance policies. 
  • Making gifts of her assets.
  • Selling or liquidating any of her assets.
  • Selling jointly owned stock.
  • Transferring, selling or refinancing your jointly titled home.
  • Signing an individual or joint tax return. 

In terms of personal and health care related matters, in most cases health care providers will look to you as the non-disabled spouse for the purpose of making decisions on your wife’s behalf even though she does not have a health care power of attorney naming you as her patient advocate.  However, this isn’t necessarily true in the case of end of life decision making in which case the health care provider may require someone with formal authority, i.e., pursuant to a court order or through a power of attorney, to make that type of decision. 

Having said the above, some states, by statute, grant a spouse certain decision-making rights on behalf of their disabled spouse when there isn’t a power of attorney in place, but in most of those cases those statutory rights are limited.  Further, even if you live in a state that has such a statute, it will be of no help to you if both you and your spouse are disabled.  Such a statute only gives such decision-making rights to a spouse, but if both spouses are disabled, that law will provide no benefit.

Based on the foregoing, I highly recommend that you consult with an estate planning attorney in your area who can further explain the importance of preparing both financial and health care power of attorneys for you, as well as prepare those documents on your behalf.  Good luck.

 

 

Jonathan J. David is a shareholder in the law firm of Foster, Swift, Collins & Smith, PC, 1700 East Beltline, N.E., Grand Rapids, Michigan 49525.

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