Changes to Financial Power of Attorney Law in Michigan

Michigan recently updated its financial power of attorney (POA) law, making it easier for people to plan for the future. While these changes are helpful, it’s important to know that the standard form offered under the new law is just the starting point. If you’re looking for comprehensive protection for yourself or a loved one, working with an experienced attorney can make all the difference. Here’s what you need to know about these changes and why personalized legal advice is essential.

What Is a Financial Power of Attorney?

A financial power of attorney (POA) is a legal document that lets you choose someone to manage your financial affairs if you’re ever unable to. This person, called your “agent” or “attorney-in-fact,” can take care of tasks like paying bills, managing your bank accounts, filing taxes, or even handling investments.

Having a POA in place is crucial for your peace of mind. If something happens—whether due to illness, injury, or other incapacity—your agent can step in and ensure your finances are managed the way you want. Without this document, your loved ones may have to go through the time-consuming and expensive process of going to court just to take care of things for you.

Michigan Adopts the Uniform Power of Attorney Act (UPOAA)

As of July 1, 2024, Michigan officially adopted the Uniform Power of Attorney Act (UPOAA). The goal of this new law is to make POAs more consistent and easier to use. By following the same rules as many other states, Michigan’s law helps reduce confusion for anyone handling POAs across state lines, especially if you move or own property in another state.

Before this change, Michigan’s POA laws were not as uniform, leading to confusion and variation. Now, with the adoption of the UPOAA, creating and using a POA is much more streamlined. But while these new forms are helpful, they may not cover everything you need, depending on your situation.

The New Statutory POA Form: A Good Start, But Not Enough

The introduction of a standard statutory POA form under the UPOAA is one of the most significant changes. It provides an easy way for the public to create a financial power of attorney without needing legal assistance. While this sounds convenient, the form only addresses basic needs and may not offer the full protection your financial situation requires.

Yes, the new form covers essentials like naming your agent and giving them authority over certain financial tasks. But, as simple as it seems, relying solely on this form could lead to unintended consequences. It may not account for more complex matters like long-term care planning, Medicaid planning, advanced tax strategies, or gifting.

Why the Statutory Form Is the Bare Minimum

If you’re serious about protecting your financial future, it’s important to realize that the statutory POA is just a starting point. Think of it as a “one-size-fits-all” solution that doesn’t fit everyone perfectly. In fact, these forms often lack crucial provisions that could be vital to your financial well-being.

For example, statutory POAs generally don’t cover more advanced planning needs, such as long-term care or Medicaid planning. Without the right language, your POA might not give your agent the authority to make decisions that could help you qualify for Medicaid or protect your assets. Similarly, if you have specific gifting plans or tax strategies in place, a basic form may not address those needs, potentially costing you or your heirs in the long run.

Why Legal Guidance Is Crucial

While the new form is convenient, the truth is that it may leave you vulnerable. A cookie-cutter solution can’t replace the value of personalized legal advice. An experienced estate planning attorney can help you customize your POA to fit your unique needs, ensuring that your financial affairs are handled exactly the way you want, no matter what happens.

Relying solely on the statutory form may expose you to financial risks such as exploitation or missed opportunities for strategic planning. Having an attorney review and draft your POA ensures it integrates with your will, trusts, and other important estate planning documents, so everything works together seamlessly.

New Rules for Senior Living Facilities

In another positive change, the new law encourages senior living facilities to make POA forms available when residents are admitted. This can help older adults designate an agent while they’re still mentally capable. For families, this brings peace of mind, knowing that a trusted person is already in place to manage financial matters if the need arises.

But even here, it’s worth remembering that while the form is helpful, having a lawyer’s guidance is still critical to make sure all your long-term planning needs are covered.

Uniform Acceptance of Notarized POAs

Under the new law, all notarized financial POAs must now be uniformly accepted across Michigan. This is a big improvement. In the past, banks or healthcare providers could reject a POA for minor reasons, causing delays or confusion. Now, notarized POAs—even those signed before July 1, 2024—must be honored, which helps ensure your agent can act when you need them to.

The Importance of Durability

A key feature of Michigan’s updated POA law is that all POAs are now automatically considered “durable.” This means that if you become mentally incapacitated (due to something like a stroke or dementia), your POA stays in effect. In the past, you had to specifically state that your POA was durable, but now this protection is built in automatically.

Durability is important because it ensures your agent can keep managing your finances if you can’t. Without this, you’d need to go through a guardianship proceeding, which can be costly and time-consuming.

Why You Should Work with an Attorney

While Michigan’s new POA law makes it easier to get a basic financial power of attorney in place, it doesn’t replace the expertise of a skilled estate planning attorney. The statutory form is a good starting point, but it’s not enough if you want comprehensive protection. Tailoring your POA to fit your unique financial and family situation is critical to avoid unintended consequences.

At Estate Planning & Elder Law Services, we help our clients create custom financial POAs that cover everything—from long-term care and Medicaid planning to advanced tax strategies and gifting. We ensure that your POA is integrated with your will, trusts, and other documents, giving you the peace of mind that your affairs are in order no matter what the future holds.

We’re Here to Help Protect Your Financial Future and Legacy

While Michigan’s new financial power of attorney law has simplified the process of appointing an agent, it’s still important to understand the details and ensure your documents are properly drafted.
If you have questions or need assistance, contact the experienced elder law attorneys at Estate Planning & Elder Law Services. We are here to guide you through these new laws, help you create or update your power of attorney documents, and ensure your financial future is protected. Contact us today for a consultation, and let us help you secure peace of mind for yourself and your family.