If you want someone to be able to deposit your checks at your bank, file your taxes, or even sell or mortgage your home, you can create a handy document called a power of attorney. A POA is a simple document that grants specific powers to someone you trust—called an "attorney-in-fact" or "agent"—to handle certain matters for you.
You can make several different types of POAs in Michigan. In particular, many estate plans include two POAs:
In most estate plans, these POAs are what are known as "durable" POAs, which means that they retain their effectiveness even after you're incapacitated. It's a good idea for most people to create these two documents, as they help plan for the unexpected.
To learn about other types of POAs, including non-durable (limited) and springing POAs, see What Is a Power of Attorney. Below, learn how to create a durable financial POA that is valid in Michigan.
For your POA to be valid in Michigan, it must meet certain requirements.
The person making a power of attorney must be of sound mind. The exact contours of this mental capacity requirement are open to interpretation by Michigan courts. In one case, a court stated that the person making the POA must be mentally competent enough to consent to, have some control over, and understand the significance and consequences of making the POA. The person should have the ability to engage in thoughtful deliberation and use reasonable judgment with regard to making the POA. (Persinger v. Holst, 639 N.W.2d 594 (Mich. Ct. App. 2001).) If you're helping someone make a POA and have questions about the person's mental capacity, you should consult an attorney.
To make a POA in Michigan, you must sign in the presence either of (1) a notary public or (2) two witnesses.
Even though you have a choice in Michigan, it's best to choose notarization, since many financial institutions will require it before they allow your attorney-in-fact to act under the POA. If you want your attorney-in-fact to be able to conduct real estate transactions, your county land records will probably require notarization as well.
If you do choose to go the witnessing route, neither of the witnesses can be named as an attorney-in-fact in your POA. (Mich. Comp. Laws §700.5501(2).)
Some private companies offer forms or templates with blanks that you can fill out to create your POA. For a more user-friendly experience, try WillMaker, which guides you through a series of questions to arrive at a POA (and estate plan) that meets your specific aims and is valid in your state. You can also hire a Michigan lawyer to create a POA for you. Many lawyers will include durable POAs as part of a more comprehensive estate plan alongside a will or living trust.
Whatever method you choose, the process of making the POA will include either granting your attorney-in-fact comprehensive powers or explicitly naming the specific powers you want your attorney-in-fact to have. For example, you might choose to grant your attorney-in-fact the power to:
In Michigan, if you want the power of attorney to be durable (so that it remains effective after your incapacitation), the document must explicitly state so. Michigan's power of attorney statute suggests wording such as ""This power of attorney is not affected by the principal's subsequent disability or incapacity, or by the lapse of time." (Mich. Comp. Laws §700.5501(1).)
As mentioned above, you can't simply sign the document and call it a day. In Michigan, you must notarize the POA or have it witnessed by two people. It's usually best to choose notarization. (See above.)
Once you have completed the POA, store the original in a safe place that your loved ones can easily access, and let them know where to find it. (It won't do much good locked away in a safe that no one can get into.) If you become incapacitated, your agent might need the original POA to act on your behalf.
You should also give a copy of the power of attorney to your attorney-in-fact so that your attorney-in-fact is familiar with the contents of the document.
If you granted the power to deal with real estate to your attorney-in-fact, you should also file a copy of your POA in the land records office (called the register of deeds in Michigan) in the county where you own real estate. This will allow the register of deeds to recognize your attorney-in-fact's authority if your attorney-in-fact ever needs to sell, mortgage, or transfer real estate for you.
You can also give copies of your durable financial POA to banks or other institutions that your attorney-in-fact might need to deal with in the future. This step might eliminate some hassles if your attorney-in-fact ever needs to use the POA. Banks can sometimes be finicky about accepting POAs; see Can Banks Refuse a Power of Attorney? for more details.
It's also worth noting that Michigan requires an attorney-in-fact or agent to sign a specific statement before the attorney-in-fact starts exercising the powers in the POA. The exact words of this statement are set out in Michigan's statute. The attorney-in-fact essentially promises to do only what's allowed by the POA, keep records of transactions, and acknowledges that civil and criminal penalties are possible if the attorney-in-fact violates duties.
Legally speaking, you can name any competent adult to serve as your attorney-in-fact. But you'll want to take into account certain practical considerations, such as the person's trustworthiness and geographical location. For more on choosing attorneys-in-fact, see What Is a Power of Attorney.
Naming a "successor" attorney-in-fact—an alternate who will become your attorney-in-fact if your first choice is unavailable for any reason—is always a good idea, as it creates a backup plan.
Your POA should state when it takes effect. It's very common for the POA to become effective immediately.
In Michigan, it's also possible to create a condition that must be satisfied before the POA becomes effective—such as a doctor declaring that you are incapacitated—but there are many reasons why this type of "springing" power of attorney is not usually advised.
Any power of attorney automatically ends at your death. A durable POA also ends if:
For more on Michigan estate planning issues, see our section on Michigan Estate Planning.