On November 7, 2023, Michigan adopted a new financial power of attorney law. It joined 29 other states in passing what’s called a uniform law. In other words, Michigan now has a financial power of attorney (sometimes called a “POA”) that’s consistent with 29 other states in the country.
In this new law, Michigan has made a number of important changes. These are the most important:
- A Michigan financial POA will now be accepted in many other states. If you spend a significant amount of time in other states, you may run into a situation where you have to use your financial power of attorney outside of Michigan. This may be a problem because laws generally differ from state to state. As far as your estate plan and your financial power of attorney, this means your financial POA may not be accepted in that state. However, with Michigan’s adoption of this uniform law, this may no longer be the case. By updating your financial power of attorney to be compliant with Michigan’s new law, your POA will more likely be accepted and used seamlessly in other states you visit.
- More protection for the financial decision makers in your POA. One of the significant benefits of Michigan’s new law is that it provides more legal protection for the people you’ve named as decision makers (otherwise called “agents”) in your financial POA. If you have difficult dynamics in your family, the person you’ve named may run the risk of being threatened with legal action and having to do an expensive accounting. Language can be included in your financial POA under this new law to legally protect your agent in situations like these. Also, if you’ve named two or more children or other people are co-agents, the new law will provide more legal protection for the person whose acting in your best interest even if another co-agent isn’t doing the right thing.
- Legal consequences of not accepting your financial POA. One of the risks under Michigan’s old financial POA law was that a financial institution (i.e. a bank or investment company) wouldn’t accept your financial power of attorney. This forced your agent to file an action in probate court, incur legal fees, and potentially have to be appointed as a conservator. Having to go through this only increased the responsibilities of your agent and added more cost to the process. Michigan’s new law has significant legal consequences if a financial institution doesn’t accept your financial power of attorney. You or your agent can threaten legal action and the financial institution still doesn’t accept your financial POA, it will be liable for your attorney fees. This is an important benefit and reason to consider updating your financial power of attorney.
If you have any questions about Michigan’s new financial POA law, feel free to contact me at feel free to contact me at phmulder@cunninghamdalman.com.
