As an adult, you might tend to focus more on present-day necessities. Your current living situation might dictate most legal documents you have as an adult. Getting a driver’s license is easy to justify, for example. You need a valid license to drive your car to work every day.
When day-to-day responsibilities can feel more important than the future, you might wonder: “Do I really need legal documents for the future right now?” Some may even say it is only for the super-wealthy. The truth is, future prep is not just for people with billion-dollar yachts and mansions, it is for every legal adult who wishes to protect their loved ones.
A family’s insulation from sudden shocks
Estate planning is the legal process of organizing your assets in case of emergency scenarios. At its core, it is a family protection strategy that works long after you cannot speak for yourself. When unexpected events like sudden deaths and hospitalizations strike, estate planning can ensure your loved ones are still financially secure.
There are 3 important documents every adult should have— and something you might have missed.
Will
A will is a legal document that dictates how you want your property distributed after your death. It allows you to name your beneficiaries, appoint guardians for your minor children and assign someone to manage your assets.
In Michigan, you need to be at least 18 years old, of sound mind and acting freely to write a valid will. Two competent adults must sign your will after watching you sign or hearing you acknowledge your signature— with one exception.
Under Michigan law, handwritten wills (known as holographic wills) are valid even if you do not notarize or have witnesses sign the document. If you decide to handwrite your will, your document must fulfill requirements:
- Date: The document must be dated
- Signature: The will must have your handwritten signature
- Handwritten material provisions: The will must include (essential parts such as the identification of beneficiaries, asset distribution instructions, appointment of executor, etc. in your handwriting
- Testamentary intent: The document must show clear evidence that you intended it to serve as your last will and testament
Your will is a legal way to honor your wishes regarding your assets. Without it, the state of Michigan will dictate who inherits or benefits from your assets (intestate laws).
Power of attorney
Sudden accidents or emergencies are stressful, and can happen to anyone regardless of age. When you are of age, you may have financial or medical decisions to make even when incapacitated. A power of attorney (or POA) names a trusted person and grants them authority to act on your behalf.
The main types of financial POA may differ in effect and scope:
- General POA: Grants broad authority to handle legal and financial matters, but terminates automatically if you become incapacitated (“durability”)
- Durable POA: Authorizes a trusted person to manage financial affairs, remaining active even if you become incapacitated
- Limited POA: Allows limited authority to act on your behalf on specific legal and financial matters, which may become “durable” if the document explicitly states so
Without a power of attorney, your family will be unable to access your finances or manage medical care during an emergency without the expensive process of petitioning a probate court.
Healthcare directive
Also known as advance directives, this legal document states your preferences for medical care. It overlaps in function with the power of attorney, in that a healthcare directive also names a trusted person. The trusted person in a healthcare directive makes decisions on your behalf when you are too ill to communicate or you are incapacitated.
Just like a will, the healthcare directive outlines your wishes in case of the unexpected. In Michigan advance directives are legally known as the Durable Power of Attorney for Healthcare (DPOA-HC) or Patient Advocate Designation, and include guidelines such as end-of-life care or additional directives like Do Not Resuscitate (DNR) orders.
No one document can guarantee full future-proofing for your family. When creating wills and other legal documents, consider seeking assistance from a law professional to ensure maximum security for your loved ones in due time.