A Lawyer in a Suit Reaching Towards the Scales of Justice on a Table | What Michigan's New Power of Attorney Law Means For You | The TGQ Law Firm

Understanding Michigan’s New Power of Attorney Law

You are probably already somewhat familiar with the concept of a Power of Attorney (POA). In general, assigning someone a Power of Attorney (POA) authorizes that person to act on your behalf if you can no longer do so yourself due to illness, injury, or cognitive decline, allowing them to sign financial documents and access financial accounts as if they were you.

What you may not be aware of is that as of July 1, 2024, the Uniform Power of Attorney Act (UPOAA) will take effect in Michigan, which significantly streamlines the rules around POAs, making policies and procedures more consistent with POA laws in other states.

This article highlights the most important POA updates you need to know moving forward.

Financial Institutions and POA Acceptance

The objective of assigning a Power of Attorney is to allow that person to represent you in financial transactions, it can be particularly frustrating if a bank, insurance company, or other financial institution refuses to accept a valid POA.

From the perspective of a financial institution, there are concerns about fraud, which may cause management to institute strict controls when verifying a POA. However, it is prudent for these institutions to be aware of updates under the UPOAA because it supersedes any internal procedures and requires that any “acknowledged” POA be accepted. For the law, acknowledged means that it has been notarized or otherwise legally authorized.

The consequences of a financial institution failing to accept a valid POA can be harsh, and if a court appearance is necessary, the bank could be liable for court costs.

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Signature Requirements for Durable POA

As a reminder, a durable Power of Attorney is differentiated from a standard Power of Attorney because a durable POA remains in effect even after the person who assigns the POA becomes unable to act on their behalf. By contrast, a standard POA ends and becomes invalid in the above situation.

From a legal standpoint, several signature requirements must be met for a durable POA to be recognized. If even one of the items on this list is missing or invalid, then the POA cannot be accepted.

The signature requirements for a Power of Attorney to be considered durable are:

  • Principal’s signature: The POA must be signed voluntarily by the principal (the person assigning the POA) or a notary public on the principal’s behalf or in the presence of two witnesses, and neither witness can be the attorney-in-fact.
  • Notarization: An acknowledgment must be made by a notary public that the principal signed the POA.
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Gift Giving and Statutory References

To ensure that the principal’s wishes and intentions are carried out accurately, anyone involved in gift-giving transactions under a POA should be informed of the latest statutory requirements, especially when gift-giving is done for estate planning purposes.

There are statutory requirements when engaging in gift-giving through a Power of Attorney, which include:

  • The scope of authority to make gifts, including the types of gifts that can be given and any restrictions or limitations
  • Requiring that the agent owes a fiduciary duty to the principal
  • Keeping accurate records of any gift-giving activity
  • Ensuring safeguards against abuse
  • Complying with other applicable laws governing gift transactions
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POA and Court Proceedings

If a financial institution refuses acceptance of a valid POA, you may find yourself needing to pursue appropriate legal action, including going to court. A common situation would be a bank interfering with the assigned agent’s ability to access an account, pay a bill, make investment decisions, etc., and the agent can then pursue legal action.

This process can begin by filing a petition with the court to enforce the POA terms, seeking either declaratory relief or an injunction for enforcement.

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Navigating the New Power of Attorney Law with The TGQ Law Firm

Being familiar with Michigan’s updated Power of Attorney laws is vital to ensuring that the person who has assigned someone a POA is protected. At The TGQ Law Firm, we have been providing personalized support and counsel for Michigan residents for over a decade.

To find out more about the new Michigan Power of Attorney laws or to seek help with legal help, please contact us at (734) 707-3232 for a consultation.

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Disclaimer: This article is not intended to be legal advice. Everyone’s situation is different and legal advice is only properly given after having reviewed your specific situation.