Michigan's Implementation of the Uniform Power of Attorney Act: A Quick Briefing

Michigan has taken a significant step in modernizing its approach to financial powers of attorney (POAs) by adopting the Uniform Power of Attorney Act (UPOAA). This new law, which went into effect on July 1, 2024, brings substantial changes to how POAs are created, executed, and utilized in the state.

Introduction to the New Law

The UPOAA, signed into law by Governor Gretchen Whitmer on November 7, 2023, replaces the previous durable power of attorney provisions in Michigan's Estates and Protected Individuals Code. This comprehensive act contains statutes relating to financial POAs, providing significantly more guidance on procedures, powers, and limitations compared to the previous statutes.

How It Affects You and Your Previously Executed Power of Attorney

If you have an existing POA executed in Michigan prior to July 1, 2024, you can rest assured that it remains valid, provided it was signed in accordance with the laws in existence at the time of execution. However, for POAs created after July 1, 2024, new rules apply. Notably, these new POAs are automatically considered “durable” unless expressly stated otherwise, meaning they remain effective even if the principal, the person executing the POA, becomes incapacitated.

This new law, importantly, does not affect Designations of Patient Advocate, sometimes known as medical powers of attorney or powers of attorney for healthcare.

Hopes for the Uniform Power of Attorney Act

The UPOAA aims to bring consistency and clarity to the use of POAs across different states. By joining 30 other states and the District of Columbia in adopting this unified framework, Michigan hopes to:

  1. Promote uniform acceptance of notarized POAs;
  2. Provide protection for third parties who rely on notarized POAs; and
  3. Offer a series of default rules that grant broad authority to agents while protecting principals from fraud.

Changes to the Law

Several key changes have been introduced with the UPOAA:

  • Durability: POAs are now presumed durable unless explicitly stated otherwise.
  • Execution Requirements: Execution of a POA under the new law is similar to the previous law. However, to be durable, a POA must be either acknowledged before a notary or signed in the presence of two witnesses.
  • Effectiveness: A POA is effective when it is executed unless the principal provides it becomes effective at a future date or upon the occurrence of a specified future event.
  • Agent Acknowledgement: An agent accepts appointment either by executing an acknowledgement (which can be found in the statute) or by exercising authority as an agent. An agent’s failure to execute an acknowledgement does not affect their authority to act, their duties, or their potential liability.
  • Co-agents: Principals can now designate multiple co-agents who can act independently unless the POA specifies otherwise.
  • Financial Institutions: When presented with a valid POA, financial institutions cannot require the principal to sign an additional POA on their forms.
  • Statutory Form: The UPOAA provides a statutory form of power of attorney.
  • Out-of-State POAs: POAs executed in compliance with the laws of the state where the individual was domiciled at the time of execution are now valid in Michigan.

This list is not intended to be exhaustive, and the Act can be found here: Uniform Power of Attorney Act.

Conclusion

The implementation of the UPOAA in Michigan represents a significant modernization of the state's approach to powers of attorney. It offers greater flexibility, clarity, and protection for both principals and agents. While existing POAs remain valid, individuals should consider updating their documents to take full advantage of the UPOAA's provisions.

As with any legal document, it's advisable to consult with a qualified attorney to ensure your POA meets your specific needs and complies with the new law. We would be happy to assist you in navigating this new law.

Article by: Ethan J. Loch

Categories: Firm News