Michigan’s New Financial Power of Attorney Law: What you need to know.

As financial institutions get accustomed to the new Uniform POA form, they may be inclined to reject old POAs in effect before July 1, 2024—even though they are technically still valid. That is why clients should update with a new Uniform POA.

Michigan recently modernized its financial Power of Attorney (POA) law, effective July 1, 2024, to create new Uniform provisions for these 5 important reasons:

Improve the acceptance of Michigan POAs by banks and financial institutions.
Improve their acceptance when POAs are used in other states by adopting the “Uniform DPOA” form used in most states.
Enhance the clarity and understandability of financial POAs.
Help avoid court control via conservatorships when incapacity happens.
Reduce the risk of financial exploitation.

The new law is called the Michigan Uniform Power of Attorney Act, being MCL 556.201 to 556. 505.

What are the key changes? The key changes are listed below:

Short form that contains a simple checklist of authorized powers. The new Uniform form allows you to adopt the statute’s checklist of authorized powers. This improves the readability and acceptance of you POA by financial institutions.
Enhanced Clarity on Agent’s ethical Duties: The new law provides clearer guidelines on the duties of an agent. This requires that agents act in your best interest, avoid conflicts of interest, and keep detailed records of their actions. These provisions help make sure agents are held accountable and follow your intentions.
Witness and Notary Requirements: To further protect against fraud and ensure authenticity, the new law requires that a POA document be signed in the presence of two witnesses or a notary public. This helps prevent disputes about its validity.
Third-Party Acceptance: One of the challenges with older POAs was getting third parties, like banks or financial institutions, to accept them. The new law includes provisions that make it more difficult for third parties to refuse to honor a valid POA.
Enhanced Durability of Power of Attorney: The new law makes it easier to make sure your POA for finances becomes durable which allows it to endure and continue in effect after you have lost capacity or become home bound.
Digital Assets Management: Recognizing the growing importance of digital assets, the new law includes provisions that let your agent manage your online accounts and digital property.

The need to have a second specific POA. In addition to the short Uniform form, it is advisable to also establish a separate comprehensive POA which will specifically cover the many actions that are not mentioned in the menu of the Uniform form and provides details to the short form allowed actions. Examples include Medicaid planning, dealing with vehicle titles, mail and many others.

Author: Attorney Robert C. Anderson | 810 W. Magnetic, Marquette, MI 49855 | 906-373-6047 | rcanderson1148@gmail.com