Michigan’s new Uniform Power of Attorney Act (UPOAA) becomes effective on July 1, 2024. This law serves several purposes, which include preventing financial exploitation of vulnerable individuals and making standard power of attorney (POA) documents more accessible to Michigan residents and more widely accepted by financial institutions in Michigan and potentially in other states. This law DOES NOT affect patient advocate designation documents or any forms authorizing anyone to exercise powers you have as a parent or guardian regarding the care, custody or property of a minor child or ward.
Does the UPOAA Affect My Existing POAs?
Existing POA documents created by Warner will still be valid under the UPOAA, as will most other existing POAs, but the rules will change regarding the durability (length of time the document is in effect) of the POA. A regular POA – one that does not include language about durability – terminates if you become incapacitated. A durable power of attorney, however, remains in effect after you become incapacitated.
The new UPOAA standard is the opposite of previous Michigan law as spelled out above. Under the UPOAA, your existing POA automatically will become a durable POA if it was signed before a notary or signed before two witnesses, neither of whom is the agent nominated in the document. If your current POA meets the new conditions for durability and you do not intend for it to be effective after your incapacity, you would need to execute a new POA with language that states that the POA is terminated by your incapacity.
Another provision of the UPOAA affects the POA validation process by financial institutions, such as your bank or credit union. Before an agent is authorized to act on your behalf, the financial institution being asked to accept the POA must confirm that the document meets with their approval. If your agent presents your POA document when you are incapacitated or otherwise unable to verify its validity, banks and financial institutions can require additional verification, including an opinion letter from an attorney, to answer questions about the validity of or any matter of law concerning the POA. This process can take some time and could interfere with your agent’s ability to timely act on your behalf. We recommend providing your POA documents to your financial institutions now so that they can complete their validation process while you are able to make changes, if needed. In the future, if you update your POA, remember to provide the updated documents to your service providers as soon as possible.
Do I Have to Sign a Bank’s POA Form?
Financial institutions and service providers may have a version of the state’s new POA form available, but they cannot require you to sign their POA form if you have an existing POA that complies with the new law. Warner attorneys have heard from several financial institutions that their employees will not be asking customers to sign a new POA form, but if you are offered one, you should not sign a replacement POA form without consulting your attorney. The signing of the new document could invalidate your current POA and may not allow your agent to act in the ways you intend.
Additionally, the statutory POA form has many choices for the types of general authority and specific authority you are giving to your agent. When looking over the preprinted statutory form provided by the financial institution, you will be required to review the various choices and decide whether you want to grant the listed authority. Every choice made on the form may have unintended consequences, may interfere with your current estate planning and may have a significant effect on your ability to do future planning to protect assets for your spouse. For these and many other reasons, Warner attorneys advise not to sign the form without consulting an attorney. Ironically, the preprinted form has many references on it warning the signer to consult an attorney before signing the document.
How Should I Prepare for the UPOAA?
- Look at your current POA documents and verify that the agents you have selected are still willing and able to serve. Ask your attorney to update these documents as needed.
- Provide copies of your POA documents to the agents named in the documents.
- Provide copies of your relevant POA documents to any institution that would need to rely on them, such as banks, credit unions, financial advisors, life insurance companies, employers and other financial institutions where you maintain accounts. This includes providing POAs that are not effective until a certain circumstance occurs, such as a POA that is not effective until you are determined to be incapacitated.
- Verify with your banks and financial institutions that they will accept these POA documents if they are needed. If they will not accept them, determine your options and reach out to your Warner attorney.
Warner can help with any issues caused by the new UPOAA. Contact your Warner attorney or Catherine Jacobs with questions regarding POA documents or the new law.
