A durable power of attorney gives the person you select the power to act in your place. But what if your agent shows the document to your financial planner and is turned away? If you are competent, you can sort out the problem yourself. But what if you’re not?
A general durable power of attorney is a very useful document in various stages of life. A soldier going overseas will give a loved one the power to handle his finances while he is away. A wife can act for her husband. Aging parents can delegate authority to a trusted child to manage their financial affairs. Most importantly, a parent who has Alzheimer’s or some other form of dementia can count on a child to take care of his or her finances.
To give written permission for someone to handle your private affairs, you sign a general durable power of attorney document. But if your document is old, it may not be bulletproof. A change to Michigan’s law (MCL 700.5501) on general durable powers of attorney became effective on May 22, 2012. This change introduced new requirements for documents signed after October 1, 2012. Nevertheless, companies with strict internal policies may resist honoring an older power of attorney.
The updated law requires that the person you appoint in your power of attorney sign an acceptance of that duty. This also includes secondary and additional agents. Furthermore, the document must either be notarized or signed in front of two witnesses who cannot be the agents named in your document. Without specific authorization, agents cannot make gifts, pay themselves, or become joint owners on an account. Agents must also maintain records of all business they conduct.
Keeping your general durable power of attorney up to date will give you these additional protections and keep the door open for your agent when you need them the most.
