Effective Date: July 1, 2024
Michigan’s new Uniform Power of Attorney Act (UPOAA) took effect on July 1, 2024. This legislation aims to protect vulnerable individuals from financial exploitation while also streamlining the use of power of attorney (POA) documents, making them more accessible for Michigan residents and ensuring they are recognized by financial institutions within the state, and across the country. It’s important to note that this new law does not impact patient advocate designation documents or any forms that authorize someone to exercise powers you hold as a parent or guardian concerning the care, custody, or property of a minor child or ward.
Does the UPOAA Affect My Existing POAs?
If you already have a POA, such as one created by Cooper & Riesterer PLC, rest assured your current documents will remain valid under the UPOAA. However, the act introduces new rules regarding the durability of POAs—meaning how long they remain in effect.
- A regular POA without language specifying durability ends if you become incapacitated.
- A durable POA, on the other hand, continues to be effective even after you become incapacitated.
Notably, the new law reverses Michigan’s previous rule on durability. Under the UPOAA, if your POA was signed before a notary or in the presence of two witnesses (neither of whom is your named agent), it automatically becomes durable. If your current POA meets these new standards for durability but you do not want it to remain effective after incapacity, you will need to create a new POA explicitly stating that it will terminate if you become incapacitated.
How the UPOAA Changes POA Validation by Financial Institutions
The UPOAA also impacts how financial institutions like banks and credit unions handle POAs. Before your agent can act on your behalf, the institution will need to validate the POA document. If you are incapacitated and unable to confirm its validity, they may request further verification—such as an opinion letter from an attorney. This process could delay your agent’s ability to act on your behalf.
To avoid these delays, it’s a good idea to submit your POA documents to your financial institutions now, while you’re still able to make changes if needed. If you update your POA in the future, make sure you provide the updated documents to your financial institutions as soon as possible.
Do I Need to Sign a Bank’s POA Form?
Some financial institutions may offer a version of the state’s new POA form, but they cannot require you to sign their form if you already have a valid POA that complies with the new law. In fact, many banks have indicated that their employees won’t ask customers to sign new POA forms. However, if you are presented with one, it’s crucial to consult your attorney before signing. Signing a new form could unintentionally invalidate your current POA and limit your agent’s authority in ways you don’t intend.
Additionally, the statutory POA form provided by financial institutions contains several choices regarding the type of authority you’re granting your agent. Careful consideration is needed, as some options could interfere with your existing estate plan or future asset protection strategies. For this reason, Cooper & Riesterer attorneys recommend not signing a new form without first consulting an attorney, even though the form itself advises seeking legal counsel.
Is a Copy of the POA Effective?
Unless otherwise stated in your POA, a photocopy or electronically transmitted copy (such as through email) of your original document will be treated as if it is your original document. In this digital age where manipulation of documents is easy for scammers, great care should be given when providing copies of documents. When dealing with financial institutions, if you (or your agent) are not able to go in person, verify that the email address or fax number you submit your POA to is legitimate.
Complying with the UPOAA: Key Steps
- Review Your Current POA: Ensure the agents you have chosen are still willing and able to serve. Consult your attorney to update these documents if necessary.
- Distribute Copies: Provide copies of your POA to the agents you’ve appointed and to relevant institutions, such as banks, credit unions, financial advisors, life insurance companies, employers, and any other institutions where you hold accounts.
- Validate with Financial Institutions: Confirm with your banks and financial institutions that they will accept your POA documents when needed. If they do not, contact your attorney to explore your options.
Taking these proactive steps can ensure a smooth transition under the new UPOAA and help avoid potential issues that could arise when your POA is needed.
By staying informed and preparing accordingly, you can ensure that your power of attorney documents continue to serve your interests under Michigan’s new law. For any concerns or updates regarding your POA, don’t hesitate to reach out to Jennifer L. Gross at [email protected], or any of the attorneys at Cooper & Riesterer, PLC.
