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Durable Power of Attorney

If your financial power of attorney (durable power of attorney) was prepared before October 2012, you should consider having the document updated.  The new Durable Power of Attorney (DPOA) law, enacted May 23, 2012 and effective October 1, 2012.

One of the biggest changes is the requirement that an attorney-in-fact must sign an acknowledgment of responsibilities.  The responsibilities detail their authority, responsibilities, rights, and limitations to act on behalf of the principal.  The attorney-in-fact, as must be now stated in the document, may be subject to civil or criminal penalties for violating his or her duties to the principal.

Some of the new details include that the new DPOA include at least all of the following provisions:

  1. Act in accordance with standards of care for fiduciaries exercising powers under a DPOA;
  2. Maintain records of the agent’s actions (receipts, disbursement, investments);
  3. Not making gifts of all or part of the principal assets unless otherwise provided in the DPOA;
  4. Upon request of the principal provide and accounting and/or informed of the agent’s actions;
  5. Take reasonable steps to follow the principal’s instruction;
  6. Not create a joint account between the agent and principal or an asset in joint tenancy, unless court ordered or otherwise provided; and,
  7. Not make gifts from the principal’s assets, unless otherwise provided.

The law should not impact the validity of existing POAs that have nonconforming Acceptances or no Acceptances. Specifically, MCL 700.5501(7) provides that the new requirements are not applicable to documents created before October 1, 2012. Of course, problems may arise in the future with institutions that refuse to accept POAs without Acceptances. Accordingly, it may be best to obtain new Acceptances, regardless of when the DPOA was signed.