Month: March 2024

Ready or not . . . big changes are coming with respect to powers of attorney in Michigan. The Uniform Power of Attorney Act (UPOAA or Act), 2023 PA 187, was signed into law in November 2023 and goes into effect July 1, 2024. It repeals Michigan’s current statutory law on durable powers of attorney, specifically Sections 700.5501-700.5505 of the Estates and Protected Individuals Code (EPIC). The UPOAA is not part of EPIC, instead, it is a stand-alone statute located at MCL 556.201 et. seq.

The UPOAA applies to all written records that grant authority to an agent to act in one or more matters on behalf of a principal (which is how the Act defines “power of attorney”)[i], with certain exceptions that are nearly identical to the exclusions currently set forth in EPIC[ii]. Powers of attorney executed in Michigan before July 1, 2024, under what will soon be considered the “old” law will remain valid so long as they complied with the laws of this state that existed at the time they were executed.[iii]

To be effective, a power of attorney created on or after July 1, 2024, must be signed by the principal or by another individual directed by the principal to sign the principal’s name in their conscious presence.[iv]

If a power of attorney is signed by the principal and either (1) acknowledged by the principal before a notary public or other individual authorized to take acknowledgments or (2) signed in the presence of 2 witnesses who also sign the power of attorney and are not an agent nominated in the power of attorney, it is considered to be durable, i.e. not terminated by the principal’s incapacity,[v] unless it expressly provides that it is terminated by the incapacity of the principal.[vi] However, if a power of attorney is signed in the principal’s conscious presence by another individual directed by the principal to sign the principal’s name, it is only considered durable if it does not expressly provide otherwise,[vii] and if it is signed in the presence of 2 witnesses who also sign the power of attorney and are not an agent nominated in the power of attorney, regardless of whether the power of attorney is acknowledged.[viii]

There are statutory benefits to having powers of attorney acknowledged by the principal. Powers of attorney that are acknowledged carry a presumption of genuineness.[ix] Whereas those that are merely witnessed, but not acknowledged, are not entitled to the same presumption of genuineness[x], which prevents those presenting the power of attorney for acceptance by third parties from relying on the protections offered under sections 119 and 120 of the UPOAA.[xi]  Subject to certain exceptions, section 120 of the UPOAA provide that a person shall either accept an acknowledged power of attorney or they may request an agent’s acknowledgment or a certification, translation, or opinion of counsel not later than 7 business days after the power is presented for acceptance.[xii] And, further, subject to certain exceptions, if such a request is made, the person must accept the power of attorney not later than 5 business days after receipt of the timely requested items (agent’s acknowledgment or certification, translation, or opinion or counsel).[xiii] A person that refuses, in violation of the Act, to accept an acknowledged power of attorney is subject to a court order mandating acceptance of the power and liability for reasonable attorney fees and costs incurred in bringing that action[xiv]; and if such refusal occurs after having requested and received a certification, translation, or opinion of counsel, the person is additionally liable for reasonable attorney fees and costs incurred in providing the requested certification, translation, or opinion of counsel.[xv]

In preparation for the UPOAA’s July 1 effective date, practitioners should consider drafting a certification of the validation of a power of attorney and agent’s authority for such situations or practitioners should save the UPOAA’s optional template set forth in Section 303[xvi] of the Act.  Practitioners should also give thought to whether they will sign such certifications on behalf of agents or principals they represent, or whether, instead, they will prepare such certifications only for an agent’s signature.

Practitioners will also need to determine whether they will review and update their current power of attorney forms to comply with the UPOAA or whether they will defer to using the new statutory form power of attorney, which is set forth in section 301[xvii] of the Act. There is also an optional template for the agent’s acknowledgment set forth in section 302[xviii] of the Act.

Some things to keep in mind when reviewing and potentially updating current powers of attorney to comply with the UPOAA include:

• • A power of attorney is effective when executed unless it provides in the power of attorney that it becomes effective at a specified future date or on the occurrence or a specified future event or contingency.[xix]
  • Execution of a power of attorney under the UPOAA does not revoke a previously executed power of attorney unless the subsequent power of attorney provides as much.[xx]
  • If a principal designates 2 or more persons to act as coagents, unless the power of attorney provides otherwise, each coagent may exercise the authority granted in the power independently.[xxi]
  • A principal may grant authority to designate one or more successor agents to an agent or other person designated by name, office, or function.[xxii]
  • Unless the power of attorney provides otherwise, an agent is entitled to reimbursement of expenses reasonably incurred on behalf of the principal and reasonable compensation for services rendered on behalf of the principal.[xxiii]
  • Certain powers may not be exercised by an agent unless the power of attorney expressly grants the agent the authority to do so, or the authority is granted by judicial order. These include the power to[xxiv]:
    • create, amend, revoke, or terminate an inter vivos trust;
    • make a gift;
    • create or change rights of survivorship;
    • create or change a beneficiary designation;
    • delegate authority granted under the power of attorney;
    • waive the principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan;
    • exercise fiduciary powers that the principal has authority to delegate;
    • exercise authority over the content of electronic communications sent or received by the principal;
    • and exercise authority over any bank, securities, or other financial account in a foreign country.
  • Notwithstanding an express grant of authority in the power as set forth above, an agent who is not an ancestor, spouse, or descendant of the principal cannot create in the agent, or in an individual to whom the agent owes a legal obligation of support, an interest in the principal’s property, whether by gift, right of survivorship, beneficiary designation, disclaimer, or otherwise unless the power of attorney provides otherwise.[xxv]
  • Sections 204 to 217 of the Act set forth several general powers that a principal can grant to an agent. They include powers related to:
    • real property[xxvi];
    • tangible personal property[xxvii];
    • stocks and bonds[xxviii];
    • banks and other financial institutions[xxix];
    • operation of an entity or business[xxx];
    • insurance and annuities[xxxi];
    • estates, trusts, and other beneficial interests[xxxii];
    • claims and litigation[xxxiii];
    • personal and family maintenance[xxxiv];
    • benefits from governmental programs or civil or military service[xxxv];
    • retirement plans[xxxvi];
    • taxes[xxxvii]; and
    • gifts[xxxviii].
  • The Act provides that any portion or all of these general powers (listed in sections 204 to 217) can be included in a power of attorney by citing the section in which the authority is described or referring to a heading or catchline of sections 204 to 217.[xxxix] If the power of attorney specifically incorporates, by reference, any of those sections, the entire section is incorporated as if that section were set out in full in the power of attorney.[xl]
  • The Act further specifies that if a power of attorney grants an agent authority to do all acts that a principal could do, the agent has all of the general authority described in sections 204 to 216.[xli]

While there may be mixed feelings among some practitioners on passage of the UPOAA, regardless of one’s feelings on the matter, practitioners must be ready for this change in the law and adapt. The good news is that practitioners have the option of adopting the statutory form power of attorney and the other optional templates in Article 3 of the Act as their own, or if they’d prefer, they may continue to use their own power of attorney forms as they’ve always done. I trust that most practitioners will find implementation of the UPOAA does not necessitate a significant number of edits to their current documents, but I also suspect that many will find they prefer the powers as set forth in the Act to their own provisions and may even adopt them as their own over time.

[i] MCL 556.203 and MCL 556.202(l).

[ii] MCL 556.203 and MCL 700.5501(7).

[iii] MCL 556.206(1).

[iv] MCL 556.205(1).

[v] MCL 556.205(2).

[vi] MCL 556.204.

[vii] Id.

[viii] MCL 556.205(3).

[ix] MCL 556.205(4).

[x] MCL 556.205(5).

[xi] Id.

[xii] MCL 556.220(1).

[xiii] MCL 556.220(2).

[xiv] MCL 556.220(4).

[xv] MCL 556.220(5).

[xvi] MCL 556.403.

[xvii] MCL 556.401.

[xviii] MCL 556.402.

[xix] MCL 556.209(1).

[xx] MCL 556.210(6).

[xxi] MCL 556.211(1).

[xxii] MCL 556.211(2).

[xxiii] MCL 556.212.

[xxiv] MCL 556.301(1).

[xxv] MCL 556.301(2).

[xxvi] MCL 556.304.

[xxvii] MCL 556.305.

[xxviii] MCL 556.306.

[xxix] MCL 556.308.

[xxx] MCL 556.309.

[xxxi] MCL 556.310.

[xxxii] MCL 556.311.

[xxxiii] MCL 556.312.

[xxxiv] MCL 556.313.

[xxxv] MCL 556.314.

[xxxvi] MCL 556.315.

[xxxvii] MCL 556.316.

[xxxviii] MCL 556.317.

[xxxix] MCL 556.302(1).

[xl] MCL 556.302(2).

[xli] MCL 556.301(3).

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

You can view Melisa’s article in the March 2024 issue of ICBA’s BRIEFS here (pages 28-30).

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If you would like to talk with an attorney about putting legal plans in place, contact attorney Melisa M. W. Mysliwiec. Melisa focuses her work in the areas of Elder Law and Medicaid planning, estate planning, and trust and estate administration. She can be reached at mmysliwiec@fraserlawfirm.com or 616-301-0800.