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Michigan Adopts Uniform Power of Attorney Act (UPOAA)

By Nicole S. McNair posted 11-17-2023 11:39

  

On November 7, 2023, Governor Whitmer signed the Uniform Power of Attorney Act (UPOAA) into law. 2023 PA 187. The UPOAA repeals the durable power of attorney provisions in the Estates and Protected Individuals Code (EPIC), MCL 700.5501–.5505. It goes into effect on July 1, 2024.

The UPOAA is a model statute developed by the Uniform Law Commission in 2006. Michigan joins 30 states and the District of Columbia in adopting this statute (or a substantially similar statute), which provides consistency in application of powers of attorney as people change states and allows Michigan to benefit from the jurisprudence of other states.

The UPOAA applies to all written records that grant authority to an agent to act on behalf of a principal with certain exceptions. Section 103. It does not invalidate powers of attorney executed before enactment as long as those powers were executed in accordance with Michigan’s requirements at the time the power was enacted. Section 106.

The UPOAA changes how a durable power of attorney is created. Under current Michigan law, powers of attorney automatically terminate if the principal is incapacitated unless the contract explicitly addresses durability. MCL 700.5501(1). Under the UPOAA, a power of attorney does not need to explicitly state it is durable. Instead, a power is durable if it is (1) acknowledged by the principal before a notary or (2) signed in the presence of two witnesses (neither may be the agent nominated in the power and one may also serve as the notary) with both witnesses also signing the durable power of attorney. Section 105(2). A power of attorney that is not notarized or witnessed is effective under the UPOAA but not durable. Section 105(1).

Current Michigan law does not outline an agent’s authority in detail, but the UPOAA contains various provisions outlining what an agent can and cannot do. Under the UPOAA, an agent does not have the right, unless expressly granted, to make any changes to a living trust, give gifts, alter rights of survivorship, create or change beneficiaries, further delegate the authority created by the power of attorney, waive the principal’s right to certain entitlements, exercise fiduciary powers that the principal has authority to delegate, or control the principal’s electronic communications or financial accounts in a foreign country. Section 201. The UPOAA also specifically details an agent’s general authority regarding real property, tangible personal property, stocks and bonds, commodities and options, banks and other financial institutions, entity or business operations, insurance and annuities, estates and trusts, claims and litigation, personal and family maintenance, government or military benefits, retirement plans, and taxes. Sections 204–217.

The UPOAA rules for when an agent is held liable for an abuse of a power of attorney are more specific than those under current Michigan law. An agent who violates the UPOAA is liable for the amount required to restore the value of the principal’s property to what it would have been had the violation not occurred, including attorney fees and costs. Section 117(1). An agent is liable for three times the value of the property if the agent embezzles or converts the principal’s property or refuses to transfer possession of the principal’s property to the principal on demand. Section 117(2).

The UPOAA also offers more protections for agents who also benefit from their efforts as long as the principal received some improved standing. Therefore, an agent that acts with “care, competence, and diligence” for the best interests of the principal would not be held liable under the UPOAA if the agent also benefits from the act. Section 114(4).

Overall, the UPOAA is far more detailed than current Michigan law on durable powers of attorney. The UPOAA also contains provisions regarding time of effectiveness (section 109), acceptance (section 113), termination (section 110), coagents and successor agents (section 111), and resignation of an agent (section 118). The UPOAA provides a statutory form power of attorney (section 301), an agent’s acknowledgment (section 302), and a certification of the validity of a power of attorney and agent’s authority (section 303), all of which can be modified as needed.

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