Michigan’s power of attorney process has changed: Understand the new law
Estate planning involves a lot of documents. And the sheer variety of these can seem overwhelming at times:
“Do I need a will or trust?”
“What’s the difference between a power of attorney and an advance directive?”
“Where do I even start to figure out what’s best for me?”
All estate planning documents are designed to ensure that your wishes are known if you are unable to make your own decisions. However, a will is activated only upon your death, while other documents may take effect during your life. This includes power of attorney, a key element in many elder care plans.
What is a power of attorney?
A power of attorney (or POA) allows you (“the principal”) to appoint a person to act on your behalf. This person, known as the “agent” in Michigan, can then make legal, financial and even medical decisions, as specified in the documentation.
In previous years, Michigan differed from many other states since it didn’t have a specific power of attorney form or uniform process. That changed recently.
With the new Uniform Power of Attorney Act (UPOAA) that went into effect July 1, 2024, the State of Michigan has taken steps to help standardize the POA process, making it easier to get one and putting in place several safeguards and guidelines.
Key benefits of the new power of attorney law
Standardization: There is now a standard form that helps to streamline setup of a power of attorney and increase access for everyone.
Consistency: Michigan’s new law was designed to be more consistent with other state’s POA laws to help address challenges with enforcement across different states. To date, 30 other states have adopted similar UPOAA legislation.
Presumption of durability: Previously, documents for a power of attorney needed to include an explicit statement identifying it as a durable POA. This type remains active after you become incapacitated, which is particularly helpful in elder care and end-of-life situations. Under the new law, if the power of attorney has been executed to meet specific POA requirements, it will automatically be considered a durable POA unless stated otherwise in the documentation.
Acceptance: In the old system, sometimes people would put a power of attorney in place only to find that a bank, insurance company or other institution wouldn’t accept it. The new law changes this and requires all financial institutions to accept any valid, notarized POA.
Protections and guidelines: The new law includes several safeguards. For the principal, this includes protections against abuse of power and fraud by an agent. But there are also safeguards for others, including third parties who accept notarized POAs in good faith. In addition, the new law includes extensive guidelines for agents.
Existing POAs: An existing power of attorney will remain valid as long as it was executed properly when it was set up and notarized.
Michigan Designation of Patient Advocate
There are related elements not included in the new law that can also be considered as part of an elder care plan. A common example is the Michigan Designation of Patient Advocate (also known as a medical or healthcare POA). This is used to give authority to someone to make medical decisions when you’re incapacitated.
Power of attorney is just one of three key types of documents that are designed to pass authority to someone else to make financial or medical decisions for you. The others include trusts and advance directives.
Call (810) 207-6670 or complete our online form to request a free phone consultation.
Buzz Suuppi
Buzz started The Plan Firm for his family, which is everything to him. Every member of his team is committed to providing effective estate planning and related solutions for families in St. Clair County, Michigan.