Benjamin Franklin once said that there are two things that are certain – death and taxes. Well, as a Grand Rapids, Mi estate planning attorney, I’m going to add one to that list – laws will constantly be changing. I remind each of our client families that their lives, what they have, what they want to happen with what they have, and the laws will change throughout their lives. That’s a big reason why we include ongoing three-year plan reviews for all our clients at no charge.
Today, a change to the durable financial power of attorney law goes into effect here in Michigan. If you enjoy reading the law yourself, you can read MCL 700.5501. I won’t go into intricate detail on all the changes, but I will point out a big one. For durable powers of attorney signed on or after October 1, 2012, the attorney-in-fact must sign a statutory acknowledgement of his or her responsibilities. The list of responsibilities can be found here (MCL 700.5501(4)).
It’s important to note that third parties (e.g., banks, retirement plan companies, life insurance companies, other financial institutions, and other people) will not be liable to anyone involved for their good-faith compliance with a durable power of attorney, even if there is no signed acknowledgment. And, I think more importantly, third parties are not liable to anyone involved for requiring that the attorney-in-fact sign an acknowledgment before they will recognize the attorney-in-fact’s power under the durable power of attorney. It wouldn’t surprise me if all financial institutions require the acknowledgment. And if that means more of them will comply with a durable power of attorney, I’m all for it.
Practically speaking, what does that mean for you? First, make sure you work with an attorney who focuses on estate planning, not one who “dabbles” in it, so they are up to speed on the latest laws and planning techniques. Second, if you haven’t updated your durable power of attorney recently, now would be a good time to do it. And third, make sure you have the your attorney-in-fact appropriately sign the required acknowledgment so that they have better odds of financial institutions following it when it’s needed most.
Give us a call if you have questions or need to have your durable power of attorney reviewed and updated.
Michael Lichterman is an estate planning and charitable planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™. This goes beyond merely planning for “stuff” – it’s about who your are and what’s important to you. He focuses on estate, charitable, and asset protection planning for all generations (“young” and “experienced”), the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses, and pet planning. He enjoys creating life long relationships with his clients centered on their family’s values, insights, stories and experiences.