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There are several ways that one person can be legally empowered to manage someone else’s money, healthcare, or other decision-making. Some of these, like powers of attorney and advance directives for healthcare, involve the person designating another person to act for them. Some options, like representative payees or guardianship, require a government agency or court to designate another person to act on the person’s behalf if the person cannot manage his or her own affairs.
To the greatest extent possible, individuals should retain control over their own decision-making or be able to choose whom they trust to make decisions for them. Options like guardianship that take away an individual’s right to make decisions should be used only as a last resort when no less restrictive alternative is available to ensure the person’s safety, well-being, or financial security.
To learn more about options to assist another person in making decisions, see the topics below.
Health Care Powers of Attorney/Patient Advocate Designation
Representative Payee/VA Fiduciary
Health Care Powers of Attorney/Patient Advocate Designation
What is a health care power of attorney (also known as an “Advance Directive” or “Patient Advocate Designation”)?
A health care power of attorney (health care POA) is a document in which you can name someone else to make health care and/or mental health care decisions for you if you are ever unable to make those decisions yourself. The person you name is called your “Patient Advocate.” You can also give your patient advocate the power to donate your organs upon your death or instructions not to donate. In addition, you can express your wishes for the kind of treatment you do or do not want and give your patient advocate instructions on how you want them to make medical or mental health care decisions for you.
Who can make a health care POA?
You can make a health care POA if you are 18 or older and can think, understand, and reason for yourself. Even a person with a cognitive impairment may be able to execute a valid power of attorney if they understand what authority they are giving to the patient advocate and understand their relationship to the person named as the patient advocate.
Why should I consider making a health care POA?
By executing a health care POA, you can choose the person who will make health care and mental health care decisions for you if you are ever unable to make decisions for yourself. You can also give instructions about what kind of care you want. The person you choose can make decisions for you as soon as it is determined that you are not able to make decisions for yourself. You can also change the person you want to serve as your patient advocate if you change your mind.
If you do not have a health care POA but become unable to make decisions for yourself, no one will have the authority to make health care or mental health care decisions for you unless and until a court appoints a guardian for you. The guardian may not be the person you would choose to make decisions for you and may not know what your wishes are regarding health care and mental health care. As long as you have a guardian, only a judge will be able to change the person who makes medical and/or mental health decisions for you.
Who should I name as my patient advocate?
You can name anyone who is 18 or older. You can name your spouse, an adult child, a friend, or any other person. Your patient advocate should be someone you trust and who can handle the responsibility. You should talk to the person you want to name as your patient advocate before you complete and sign the document to make sure the person is willing to serve and that you feel comfortable with how they will make decisions for you.
How do I create a health care POA?
You can use this Do-It-Yourself Health Care Power of Attorney tool to prepare your health care POA. Once you finish, your customized health care POA and instructions will be ready to print. Your health care POA is valid as soon as it is properly filled out, signed, and witnessed by at least two other people. The witnesses must be 18 or older. The witnesses cannot be any of the following people:
- A family member
- Your doctor
- Your patient advocate
- An employee of a health facility or program where you are a patient
Before your patient advocate can make decisions for you, they must sign an acceptance. The acceptance describes the rights and responsibilities of your patient advocate defined by law. Your patient advocate can sign at the time you prepare the document or at a later time.
When will my patient advocate be able to make decisions for me?
Your patient advocate can only make decisions for you if your doctor and either another doctor or a licensed psychologist determine in writing that you cannot participate in medical and/or mental health treatment decisions. These written determinations should be made part of your medical record. If there is a disagreement about whether you can participate in medical or mental health decisions, a petition may need to be filed in court so a judge can determine whether you are able to make your own decisions.
A determination that you cannot participate in medical and/or mental health treatment decisions is supposed to be reviewed at least annually. If you recover the ability to make your own medical or mental health decisions, the patient advocate designation should be suspended. At that time, your patient advocate will not be permitted to make decisions for you and you will be able to make decisions for yourself.
How do I revoke (cancel) my health care POA?
You can revoke your health care POA at any time and in any way even if you cannot make medical or mental health decisions for yourself. However, if you revoke your health care POA when you are not able to think clearly, you may not be able to create a valid new health care POA naming another person to be your patient advocate.
It is best to revoke the health care power of attorney in writing and send copies of the revocation to anyone, including your doctors or other health care providers, who might rely on the document. You should also send copies of the revocation to your patient advocate. You can also revoke a health care POA by executing a new health care POA that either makes clear that the prior power of attorney is revoked.
Your patient advocate can also decide not to continue serving as your patient advocate. If you named a successor patient advocate in your health care power of attorney, that person can take over serving as your patient advocate. A judge can also remove a patient advocate if the judge determines the patient advocate is not acting in your best interest or does not have the authority to act for you.
Finally, a health care power of attorney will be terminated if there is language in the document that makes clear when it should terminate or if you die. A health care POA will also be suspended if you named your spouse as your patient advocate during your marriage and there is a pending case for divorce, annulment, or separate maintenance. Once there is a Judgment of Divorce, your former spouse will be removed as your patient advocate.
Can I revoke a mental health care POA?
You can waive your right to revoke a health care POA for mental health treatment for up to 30 days. If you include this waiver in your health care POA, your patient advocate can continue to make decisions for up to 30 days even if you want to revoke the health care POA. A patient advocate can only make mental health treatment decisions if a physician and mental health practitioner agree that you cannot give informed consent. If you still want to revoke your health care POA after 30 days, you can do so.
Financial Powers of Attorney
What is a financial power of attorney?
A financial power of attorney is a legal document in which one person (“the principal”) authorizes another person (the “agent”) to make financial decisions for them. Powers of attorney must be in writing. They can be very limited, such as a power of attorney over a single bank account, or very broad, such as a power of attorney that permits another person to make virtually all financial decisions that a person could make himself or herself.
A person executing a power of attorney can name one person to serve as his or her agent or can name two or more individuals to act as co-agents. Unless the document states otherwise, co-agents will each be able to act independently on behalf of the principal. A person can also name a successor agent or agent who can serve if the agent dies, becomes incapacitated, or is unable to continue serving as the person’s agent.
Most financial powers of attorney are “durable” powers of attorney. This means that they remain in effect even if the person who signed the document (the principal) becomes incapacitated and can no longer make decisions themselves regardless of how long it has been since the principal signed the document. Durable powers of attorney executed before July 1, 2024, must contain language that clearly indicates the person signing the document intended for the document to remain in effect even if they become incapacitated. Powers of attorney executed on or after July 1, 2024, in accordance with Michigan’s Uniform Power of Attorney Act, are presumed to be durable unless they state otherwise.
What are the advantages and disadvantages of executing a durable power of attorney?
Durable powers of attorney can be easy and inexpensive to create. The person signing the document can explain how he or she wants finances handled in the future and can nominate the person he or she would like to serve as guardian or conservator if it is ever necessary for a court to appoint one in the future. Often, guardianship or conservatorship won’t be necessary, even if the person loses the capacity to make financial decisions if they have already signed a durable power of attorney. In that case, the agent can step in promptly to manage the individual’s affairs.
However, there is no court involvement or oversight of the agent acting under a power of attorney so it can be easy for the agent to misuse funds or financially exploit the principal. Individuals should not execute a power of attorney naming a person as their agent unless they are very confident they can trust the agent to manage their affairs responsibly and appropriately.
How do I create a financial power of attorney?
Individuals can only execute a valid power of attorney if they understand what they are doing. For example, a person who executes a valid power of attorney should understand who they are naming to act as their agent and what their relationship to that person is, what powers they are giving their agent, and generally what property of funds they own that will be managed by their agent. Even a person with a cognitive impairment may have sufficient capacity to execute a valid power of attorney but a person who cannot understand the impact of what they are signing or does not understand who they are naming as their agent should not sign a power of attorney.
Michigan’s new Uniform Power of Attorney Act, effective July 1, 2024, contains a form of power of attorney that individuals may, but do not have to use. You can also draft your own power of attorney document or use a different form.
To execute a durable power of attorney, the principal must sign the document or direct another person to sign it for them. The document should be witnessed and signed by two people, neither of whom is named as the agent in the document or acknowledged in front of a notary public. The agent should also sign a document that acknowledges their duties and responsibilities. The Uniform Power of Attorney Act, effective July 1, 2024, contains an acknowledgment form that the agent may, but does not have to, use.
How do I revoke (cancel) my durable power of attorney?
You can revoke (cancel) a durable power of attorney if you understand what you are doing and have the capacity to do so. To revoke a power of attorney, you should sign a document that states you are revoking the power of attorney and share copies of the revocation with any person or institution (like your bank) that might rely on the power of attorney.
A durable power of attorney will also be terminated if the person who signed it dies or an event described in the document as an occasion when the document should be terminated occurs. In addition, if the agent dies, resigns, or becomes incapacitated, and the document does not name another person to assume the agent’s responsibilities, the document will be terminated. Finally, unless the document states otherwise, if the principal and the agent are married, the document will terminate if an action is filed for a legal separation or to annul or dissolve their marriage.
Representative Payee/VA Fiduciary
What is a Representative Payee?
Both the Social Security Administration (SSA) and the Department of Veterans Affairs (VA) allow another person to be appointed as a Representative Payee if the individual receiving benefits is unable to manage his or her own funds. The VA also refers to this arrangement as a “VA Fiduciary.” The Representative Payee or Fiduciary is required to use the funds for the benefit of the individual who is entitled to the funds.
When will a Representative Payee or Fiduciary be appointed?
The Social Security Administration will appoint a Representative Payee for Social Security or Supplemental Security Income (SSI) payments if, after investigation, it determines that a beneficiary is incapable of managing or directing the management of his or her benefits. Beneficiaries who disagree with SSA’s decision to appoint a Representative Payee or with the person SSA chooses as the Representative Payee has 60 days to appeal the decision by contacting SSA. Beneficiaries with Representative Payees who believe they no longer require another person to manage their funds may provide evidence to SSA that they have recovered sufficiently to manage their own funds but, for individuals receiving disability benefits, this request may trigger a re-evaluation of the person’s eligibility for disability payments.
The VA will appoint a Representative Payee or Fiduciary if there is medical evidence or a court determination that a beneficiary is unable to manage his or her benefits or financial affairs. A beneficiary who disagrees with the decision can appeal to the Board of Veterans Appeals.
Who Will Be Selected as My Representative Payee or Fiduciary?
SSA tries to select someone who sees the beneficiary frequently and understands what the beneficiary needs. Therefore, the representative payee may be a person who lives with the beneficiary, a family member, a friend, a lawyer, a guardian, or a person who works with a social services agency or other organization. The beneficiary can request that a particular person be appointed and SSA will consider that request.
Similarly, the VA may appoint a family member, a guardian, another interested party, or a professional fiduciary. In selecting a fiduciary, the VA determines the willingness of the person to serve, a credit report review, a criminal background check, and interviews with character witnesses.
What Will My Representative Payee or Fiduciary Do?
An SSA Representative Payee must spend benefits on the beneficiary’s needs and, once those are met, can pay off debts, use the funds to enhance the beneficiary’s life, or save any excess funds. If asked by the SSA, the Representative Payee must provide an accounting of how the money has been spent. The Representative Payee must also alert the SSA if there are changes in the beneficiary’s life that could affect his or her eligibility for continuing benefits or changes in the Representative Payee’s life that may make him or her unable to continue serving as Representative Payee.
The VA Fiduciary also has to spend the VA benefits on the beneficiary’s (or the beneficiary’s recognized dependents’) needs and to pay off the beneficiary’s debts or conserve any remaining money. Like the SSA Representative Payee, the VA Fiduciary must keep records of how funds were used and may be asked to provide periodic accountings.
There are legal requirements for how Representative Payees and VA Fiduciaries use the beneficiary’s funds and what they must report. Contact the SSA or the VA for further information on Representative Payees’ and Fiduciaries’ responsibilities.
What if my Representative Payee or Fiduciary is Misusing My Funds?
If you think your Representative Payee is misusing your funds, you should tell SSA right away. SSA will investigate and notify you in writing what they found. If misuse has occurred, they may remove the Representative Payee, seek to recover the funds or take other action. The VA also has specific rules for investigating any allegation that a Fiduciary is misusing VA funds. Beneficiaries who are concerned about the possible misuse of funds should notify the VA right away.
Guardianship
What is Guardianship?
Guardianship is when a court determines that a person cannot make or communicate informed decisions and that it is necessary to appoint another individual to make decisions for the person. A judge may authorize a guardian to make only limited types of decisions for a person or may authorize the guardian to make virtually all decisions in the person’s life. In most cases, guardians have broad powers to make decisions for the person under guardianship (sometimes called the “ward.”)
Because guardianship strips individuals of the treasured right to make decisions for themselves, the person alleged to be incapacitated has many due process rights before and during the hearing. In addition, guardianship should only be used as a last resort when no other alternative will meet the person’s needs. For more information about less restrictive alternatives to guardianship, see MEJI’s Michigan Guardianship Diversion Project.
There are two kinds of guardianships for adults in Michigan. One kind of guardianship under the Mental Health Code is for individuals who have intellectual or developmental disabilities. The other type of guardianship under the Estates and Protected Individuals Code is for “legally incapacitated adults.” Both kinds of guardianship cases are heard in county probate courts.
How is a guardian appointed?
Any interested person, or the person himself or herself, can file a petition for guardianship in the probate court in the county where the individual resides or is present. The petition must provide information about why guardianship is necessary. Once the petition is filed, if the person who is alleged to be incapacitated does not have a lawyer, the court will appoint a guardian ad litem to investigate the case and prepare a report. The guardian ad litem does not serve as the person’s guardian or as the person’s lawyer but is an independent investigator. The court may also order that the person be examined by a doctor or mental health professional.
If the person alleged to be incapacitated wants to contest the petition, seeks to limit the guardianship, objects to the proposed guardian, asks to be represented by a lawyer, or if the guardian ad litem determines it is in the individual’s best interest to be represented by counsel, a lawyer will be appointed for the person. If the person cannot afford a lawyer, the court will pay for the lawyer.
The court must hold a hearing on the guardianship petition. The court may only appoint a guardian if it determines by clear and convincing evidence –a very high standard of proof– that the person lacks the ability to make or communicate informed decisions and that guardianship is necessary to provide for the individual’s care and supervision.
Who can be appointed guardian?
Any competent person may be appointed as a guardian. The person must be over age 18, suitable, and willing to serve. Michigan law states who has priority for appointment as a person’s guardian. The highest priority is a guardian appointed for the person in another state followed by a person nominated by the individual. Professional guardians are supposed to be appointed only if no one else who has a higher priority is available and suitable.
Do I have rights once a guardian is appointed for me?
Yes. Michigan law provides an extensive list of rights for people under guardianship. These include a periodic review of guardianship by the court, a guardianship designed to encourage maximum self-reliance and independence, the right to request modification or termination of the guardianship through an informal letter to the judge, a quarterly visit from the guardian, the right to consult with the guardian about major life decisions, and other rights.
How can I change guardians or terminate the guardianship?
After a guardian is appointed, only a judge can modify or terminate it. If it is too late to appeal the guardianship decision, you or someone interested in your welfare can petition to modify or terminate your guardianship. A legal services lawyer or private lawyer may be available to represent you if you want to modify or terminate your guardianship.
What is happening in guardianship?
There have long been concerns expressed about Michigan’s guardianship system. In 2019, the Attorney General, Dana Nessel, created an Elder Abuse Task Force that sought to address many of the systemic issues with the guardianship system. For more information about the Task Force's efforts to improve the guardianship system, see the Elder Abuse Task Force website.