Conservatorships Blog
Battle Creek Estate Planning - Conservatorships Blog

Durable Power of Attorney and Patient Advocate

Posted: December 4, 2018

A conservatorship and, in many cases, a guardianship may be avoided by the disabled person executing a durable power of attorney appointing another person called an attorney-in-fact to handle their financial affairs and to make other decisions for them. A durable power of attorney differs from an ordinary power of attorney because it survives the incapacity of the principal. The document, to be a durable power of attorney, must contain the words "This power of attorney shall not be affected by disability of the principal," or "This power of attorney shall become effective upon the disability of the principal," or similar words showing the intent of the principal that the authority conferred shall be exercisable notwithstanding his or her disability, the authority of the attorney-in-fact or agent is exercisable by him or her as provided in the power on behalf of the principal notwithstanding later disability or incapacity of the principal or later uncertainty as to whether the principal is dead or alive. For this alternative to be available, the principal must be able to execute the power of attorney while still competent and able to understand what he or she is signing. If the document was validly executed, the attorney in fact may handle the principal's affairs after the principal is no longer able to do so. An attorney in fact may also act for the principal when the principal is under no disability if the documents authorize such actions. An attorney in fact may not act after they learn of the principal's death. From that point, only a personal representative has the authority to act for the deceased.

The EPIC now provides in sections 5506 to 5513 for the designation of a patient advocate. This is accomplished by a special type of power of attorney. The patient advocate is authorized to make medical decisions concerning the principal when the principal is unable to do so. This section contains numerous protections against the patient advocate abusing this authority. If properly appointed, the patient advocate can do such things as tell the doctors not to use artificial life support or to disconnect the principal from such supports. An attorney should be consulted when this document is drafted.

 

 

MCL 700.1503 Portfolio Strategy; Risk and Return Objectives:

Posted November 20, 2018

A fiduciary's investment and management decisions with respect to individual assets shall be evaluated not in isolation, but rather in the context of the fiduciary estate portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the fiduciary estate. Among circumstances that a fiduciary must consider in investing and managing fiduciary assets are all of the following that are relevant to the fiduciary estate or its beneficiaries:

  • General economic conditions.
  • The possible effect of inflation or deflation.
  • The expected tax consequences of an investment decision or strategy.

The role that each investment or course of action plays within the overall portfolio, which may include financial assets, interests in closely-held enterprises, tangible and intangible personal property, and real property.

  • The expected total return from income and the appreciation of capital.
  • Other resources of the beneficiaries.
  • The need for liquidity, regularity of income, and preservation or appreciation of capital.
  • An asset's special relationship or special value, if any, to the purposes of the fiduciary estate or to 1 or more of the beneficiaries.

A fiduciary shall make a reasonable effort to verify facts relevant to the investment and management of fiduciary assets. A fiduciary may invest in any kind of property or type of investment consistent with the standards of the Michigan prudent investor rule. A particular investment is not inherently prudent or imprudent. A fiduciary who has special skill or expertise, or is named fiduciary in reliance upon the fiduciary's representation that the fiduciary has special skill or expertise, has a duty to use that special skill or expertise.

 

Conservators:

Posted October 3, 2018

Conservators are particular types of "fiduciaries". The word "fiduciary" is a derivative from the Latin word "fides" meaning faith, honesty or honor. A fiduciary is one appointed by the Court or by a legal document such as a will, trust or power of attorney, who has a duty to act primarily for the benefit of another. In a minor conservatorship, the minor may also be referred to as the "protected individual".

In minor conservatorships the assets are normally placed in restricted accounts. This usually relieves the conservator of the burden of accounting to the Court until the minor turns 18. The Court does require a Verification of Funds on Deposit, along with a current account summary or monthly statement from the financial institution, to be filed each year.

When the minor turns 18 the conservator must file a Minor Conservator - Final Account, Waiver, Consent and Order Form . The Final Account shows all receipts, disbursements, during the accounting period. It will also show the property remaining in the hands of the fiduciary at the end of the accounting period, together with the form of such property. The Waiver and Consent portion of the form is signed by the minor and indicates that the minor has seen the Final Account and consents to the allowance of the account without hearing. The order allows the Final Account and authorizes the financial institution to turn over the assets to the ward. Upon filing a Receipt of Ward and Discharge signed by the ward, the conservator will normally be discharged.

 

 

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