Financial Planning

Michigan’s New Uniform Power of Attorney Act Might Require Updating Your POA

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Michigan’s new Uniform Power of Attorney Act (UPOAA), effective on July 1, might require your Power of Attorney to be updated. Here’s what you need to know and why it might be important to update your POA.

What is the Uniform Power of Attorney Act?

The UPOAA is a set of laws designed to standardize and clarify the rules governing financial POAs across different states. Michigan’s adoption of the UPOAA aims to ensure greater consistency, protection, and understanding for both the principals (those granting the POA) and the agents (those acting on behalf of the principal).

Key Changes Under the UPOAA

Agent’s Acknowledgment

  • One of the significant changes introduced by the UPOAA is the requirement for an Agent’s Acknowledgment. This means that the individual(s) appointed as your agent must sign a document acknowledging their role and understanding of their duties and responsibilities under the POA. An Agent’s Acknowledgment will replace an Acknowledgment of Responsibilities that might already be attached to an existing POA.

Enhanced Clarity and Protection

  • The UPOAA provides clearer definitions of an agent’s authority, obligations, and prohibited actions – aiming to help prevent misuse and ensure agents act in a principal’s best interest.

Why Update Your Power of Attorney?

Legal Compliance

  • Updating your POA to include the Agent’s Acknowledgment helps ensure that your POA complies with the latest state laws. Non-compliant POAs might not be accepted by your bank, credit union, or other financial companies.

Agent Accountability

  • By having your agent sign an acknowledgment, you notify your agent of their responsibilities, reducing the risk of misunderstandings or misuse of their authority.

Peace of Mind

  • Knowing that your POA documents meet current legal standards and that your agent is informed of their duties provides peace of mind for you and your loved ones.

Steps to Update Your Power of Attorney

Review Your Current Power of Attorney

  • Examine your existing Power of Attorney to identify any needed updates or changes that you would like to make (i.e., changing your named Agents);
  • If you need to make changes to your existing Power of Attorney, you can order a new Power of Attorney through our Legal Store.
  • If you do not need a new Power of Attorney, you can order an Agent’s Acknowledgment through our Legal Store that you will attach to your existing Power of Attorney.

Conclusion

Keeping your Power of Attorney up to date is essential for ensuring that your wishes are honored and your interests protected. With the adoption of Michigan’s Uniform Power of Attorney Act, adding an Agent’s Acknowledgment is a critical step. We encourage you to act promptly to update your Power of Attorney.

By staying informed and proactive, you can help ensure that your Power of Attorney remains a powerful tool for managing your affairs, providing clarity and security for you and your loved ones.

– Michigan’s New Qualified Dispositions In Trust Act Makes Asset Protection Easier

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Episode Video

Episode Podcast

Tom discusses Michigan’s new Qualified Dispositions in Trust Act that makes it easier to create a trust to protect your assets from your creditors. Find out how simple it can now be to protect what you own from risks of lawsuits and creditors.

New Tax Benefit of Charitable Contribution From Your IRA

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The recently passed Protecting Americans from Tax Hikes (PATH) Act of 2015 made Charitable IRA rollover legislation permanent for 2015 and future years.

With the Charitable Rollover IRA, you can make a contribution to a public charity directly from your IRA (or Roth IRA). To qualify:

  • you must be at least age 70 ½ on the date of the contribution
  • the contribution may not exceed $100,000
  • the contribution has to be made directly by the IRA custodian to the charity.

To take advantage, simply direct the custodian of your IRA to make the charitable contribution. The portion of the IRA so contributed (up to $100,000) never comes into your income.

Please note, a 401k or other retirement plan is not eligible unless it is first rolled into an IRA.

A Tax-Smart Strategy for Managing Retirement Withdrawals

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Here is a link to a  Morningstar interview of Vanguard retirement expert Maria Bruno in which she discusses strategies for managing retirement withdrawals to minimize tax consequences. Maria explains which accounts (i.e. taxable investments, IRAs, 401ks, Roth IRAs) should be used before others in order to minimize your taxes.

Tom