Adding Oversight to Power-of-Attorney Documents: How to Protect Your Loved Ones

When a parent or loved one chooses someone to serve as their power of attorney (POA), the intent is often straightforward: to ensure a trusted individual can handle financial or legal matters if they’re no longer able to do so themselves.

However, many families aren’t fully aware of just how much authority this document grants—or how quickly problems can arise if proper precautions aren’t in place.

Power of Attorney Is a Powerful Document

In Michigan, a durable financial power of attorney (POA) can authorize the chosen agent to:

• Pay bills
• Access and manage bank accounts
• Buy or sell property
• Oversee investments
• Handle legal claims and tax matters

While this level of authority is often essential, it also carries the risk of misuse or financial exploitation, particularly if the agent operates without oversight or the document isn’t clearly worded.

That’s why effectiveestate planning isn’t just about who is chosen as agent—it’s also about how their responsibilities are defined and managed..

Oversight Features That Make a Difference

You don’t have to choose between granting someone authority and protecting your family’s interests. There are practical ways to introduce checks and accountability:

• Require Two Signatures for Major Transactions: For substantial transfers, you can limit power by requiring another individual to co-sign or approve any significant changes.
• Appoint a POA Monitor: Assign a monitor with the right to receive updates or request reports on the agent's financial management. This added transparency can help deter abuse and catch issues early.
• Specify Restrictions in the POA: You can include clear limits in the document itself, such as prohibiting changes to beneficiary designations or capping the amount allowed for gifting.
• Set Activation Conditions: Rather than granting full authority right away, consider a “springing” POA that only goes into effect after a doctor confirms incapacity.

These strategies make it easier to balance the need for control with important family protections.

When Should You Review or Update a POA?

Even if your parent or loved one already has a power of attorney, it’s essential to revisit and review it—especially in these situations:

• The document is several years old.
• The chosen agent is no longer available, is in poor health, or is less trustworthy than before.
• There have been changes within your family.
• You’ve noticed disagreements, worries, or confusion about financial matters.

As with any estate planning document, a POA should always reflect your family’s current circumstances, relationships, and financial needs.

The Right POA Is a Gift to Your Family

Establishing a power of attorney, or updating an existing one, isn’t about anticipating the worst. It’s about safeguarding what’s important and providing your family with clarity, support, and peace of mind.

With careful planning and the right advice, you can create a POA that empowers your loved ones while still protecting their well-being.