Powers of Attorney
Probate
Powers of Attorney Give Flexibility & Protection
A “power of attorney” (or POA) is merely a document, by which one person can designate an agent to assist them, or to act for them in matters of financial & business affairs, or in the event of incapacity.
Michigan law refers to financial/business powers of attorney as “Durable Powers”, which can be effective either immediately, or upon disability. I refer to them as financial/business powers of attorney, for clarity’s sake, and to distinguish them from medical or health care POA documents.
The term “durable power” comes from MCLA §700.5501, which indicates that it is not affected by the later disability or incapacity of the “principal”, a term which refers to the one who designates another to be his agent. It seems self-evident that the reason to set up the power of attorney in the first place, is that it enables the principal’s wishes (financial or health care-related) to be carried out, even though the principal him/herself cannot carry out those wishes on their own, without the help of an agent of some type.
Importantly, in order to execute and implement either a financial, or a medical POA, one must be of sound mind. These documents cannot lawfully be signed or implemented, once the person is mentally disabled.
Michigan law recognizes two basic types of Power of Attorney documents, as follows:
Durable Power of Attorney; and
Durable Power of Attorney for Health Care.
Again, while these are official terms, as used in the statutes, I find them confusing, because the term does not tell us what kind of Power of Attorney document we are talking about.
Therefore, I prefer to use the terms, “Financial Power of Attorney” to refer to the document that enables one person to act on another’s behalf, in non-medical/health care situations; and “Medical Power of Attorney” to refer to Powers of Attorney used in medical/health care situations.
The Michigan Uniform Power of Attorney Act (UPOAA) is the statutory scheme that governs what I call “Financial Powers of Attorney”.
Under the UPOAA, a Power of Attorney document is presumed “durable”, unless the document explicitly says otherwise. In turn, “durability” refers to a document which remains legally active, even if the “principal” (the person giving authority to someone else) becomes mentally or physically incapacitated.
A POA must be executed, or signed, by the principal (whose signature must be notarized). The document must be witnessed, by two “disinterested” persons (i.e., persons not designated as an agent in the POA).
A POA allows a person to conduct specific functions, as set forth in the POA document. A POA document is always revocable.
Importantly, a POA document is presumed to take effect when executed, unless the document indicates that it is to take effect, only on a contingency, like the principal’s disability.
The authority granted to the agent in the POA document must be acknowledged by the agent, under Michigan law, although the agent’s failure to acknowledge the grant of authority does not affect that agent’s authority to accident, nor does it exonerated them from liability to the principal, for potential breaches of duty.
MI law recognizes certain classes of people who may petition a court for an interpretation of the POA document, or a review of the agent’s conduct:
*Principal/agent
*Guardian/conservator, or other fiduciary
*Agent on a “Medical POA”
*Anyone who would be an intestate heir of the principal, if the principal were to die intestate
*Potential beneficiaries of the principal;
*Estate PR/executor of the principal’s estate;
*Adult Protective Services
*A caregiver, or other person who “demonstrates sufficient interest in the principal’s welfare;
*A person asked to accept the POA
The circumstances and the procedure under which an agent may resign are set forth in MCLA §556.218. In essence, notice must be given to persons designated in that statute.
MCLA §556.219 sets forth the legal ability of third persons to rely in good faith on the validity of POA documents presented to them, with or without acknowledgements by the agent. This also applies to POA documents written in languages other than English. The rule allowing good faith reliance also applies if a written opinion of counsel is provided to the effect that the POA document is valid.
These documents are covered by MCLA §700.5501 to MCLA §700.5520, of the EPIC statute. While the issues discussed in these sections are oriented more toward the medical, physical and mental care provided to the principal, most of the procedural requirements that relate to “financial Powers of Attorney” (document execution, witnesses, duties of the agent, ability of third-parties to rely in good faith of the principal, as indicated in the Power of Attorney document, etc) also apply to “Medical Powers of Attorney”, or Patient Advocate Designations.
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Frequently Asked Questions. Honest Answers.
In a “power of attorney” document, one person gives to another, the right to act on their behalf in certain situations, subject to the limitations in the “power of attorney” document.
In the law, there is a concept called “principal & agency”. The “principal” is the boss, the person giving the authority to someone else, while the “agent” is the employee, the person acting on the boss’ authority.
In addition to the “Power of Attorney” documents referred to above, most such documents which are drawn and executed according to the law of another state, will usually be respected in Michigan.
Yes. Typically, a “Power of Attorney”, must be notarized AND witnessed, by two “disinterested” persons. By “disinterested”, the law means that anyone given authority in a POA document, or anyone whose rights might be affected in some other way, by a POA document, cannot serve as a witness.
As a lawyer licensed in Michigan only, I cannot give advice as to how POA’s should be executed in other states, where it is expected that the duties of the agent will be discharged in Michigan. However, there are some legal authorities who make the sound recommendation, that a POA drawn & executed in another state, which is expected to be implemented here in Michigan, be notarized and witnessed according to our standards.
