Michigan Durable Financial Power of Attorney: Who Handles Your Money If You Can’t

Most people think of estate planning as a set of instructions for after they die. That is what a will does: it speaks only at death. But there is a gap a will never covers: what happens if you are still alive and simply cannot manage your own finances. A stroke, a serious accident, or advancing dementia can leave you unable to sign a check, pay a mortgage, or deal with the IRS, even though you are very much still here.

The document that fills that gap is the financial power of attorney. It lets someone you choose handle money and property matters on your behalf while you are alive. Unless you provide otherwise, it can be used as soon as it is signed, not only if you later become unable to act for yourself. Without one, your family may have to ask a Michigan probate court to appoint a conservator, a slower, more expensive, and more public process than signing one document in advance. And because Michigan replaced its power-of-attorney law effective July 1, 2024, it is worth understanding how these documents work under the current rules.

What a financial power of attorney actually does

A financial power of attorney is a written document in which you, the principal, give another person, your agent (the older term is “attorney-in-fact,” and it does not mean a lawyer), authority to act for you in financial matters. Depending on how it is written, that authority can be broad (essentially everything: banking, real estate, taxes, investments, retirement accounts, running a business) or narrow (a single transaction, like selling one piece of property).

The key word is financial. This document is about money and property. It does not give anyone the power to make your medical decisions.

Some powers must be specifically granted

Even a broadly written power of attorney does not automatically let an agent do everything you could do. Michigan law requires express authorization for certain actions that can significantly affect an estate plan, including making gifts, changing beneficiary designations or survivorship rights, and creating, amending, revoking, or terminating a living trust (MCL 556.301). Those choices deserve particular attention when the document is drafted, and they are a large part of why a power of attorney prepared with counsel does more than a generic form pulled off the internet.

It is not the same as a patient advocate designation

Michigan deliberately splits health and money into two separate documents. Decisions about your medical care are handled by a patient advocate designation, Michigan’s version of a medical power of attorney. Your money and property are handled by the financial power of attorney described here. They are governed by different statutes, carry different rules, and can name different people (or the same person, if you prefer). A complete plan usually includes both, so that whether the problem is a medical decision or an unpaid bill, someone you trust already has clear authority to act.

Michigan’s new Power of Attorney Act (effective July 1, 2024)

Michigan replaced its brief prior statute with the Uniform Power of Attorney Act (2023 Public Act 187, MCL 556.201 and following), which took effect July 1, 2024. The old law was a handful of sections; the new one runs to dozens, with far more detailed rules on how a power of attorney is signed, what an agent may and must do, and when a bank or other third party has to honor it.

If you signed a valid power of attorney before July 1, 2024, it generally remains valid: MCL 556.206 measures a document’s validity by the execution law in effect when it was signed. At the same time, MCL 556.503 generally applies the new Act to powers of attorney created before, on, or after July 1, 2024, subject to some transitional exceptions. That is a good reason to have an older power of attorney reviewed, both to confirm it will still be honored and to make sure it still says what you want.

How a valid power of attorney is signed, and why “durable” depends on it

Under MCL 556.205, a Michigan power of attorney created after July 1, 2024 must be signed by you (or, at your direction and in your conscious presence, by someone else signing your name for you). But signing alone does not necessarily make the power durable. If you sign it yourself, it must also either be acknowledged before a notary public or signed in the presence of two witnesses to remain effective during your incapacity. If someone else signs your name at your direction, two witnesses are required for durability, even if the document is also notarized. A witness may not be an agent you name in the document.

Why does this matter? For estate-planning purposes, durability is usually the point. Under MCL 556.204, a power of attorney executed with those formalities is durable, meaning it stays effective if you later become incapacitated, unless the document expressly says otherwise. A power of attorney that is not executed that way is not durable, and would stop working at the very moment you need it most.

Practical takeaway: if you are signing the document yourself, have it notarized. That makes durability the default and gives the document important additional protection when it is presented to a bank or other institution.

When it takes effect: immediate vs. “springing”

Under MCL 556.209, a power of attorney is effective as soon as you sign it, unless you specify that it starts on a later date or on a particular event, most commonly your own incapacity. A power that only “springs” into effect upon incapacity can sound appealing, because your agent holds no power while you are well.

The tradeoff is proof. Before anyone will honor a springing power, someone has to establish that you are, in fact, incapacitated. If your document does not name who makes that call, the statute requires a written determination by a physician or licensed psychologist, or, on the statute’s other ground, by an attorney, judge, or appropriate official. That step takes time, exactly when speed may matter. Many people instead sign a power that is effective immediately and simply entrust it to an agent they fully trust, holding the signed document until it is needed. Neither approach is “correct”; it depends on how much you weigh control over when the agent’s authority begins against ease of use later.

Choosing your agent is the real decision

Everything else is mechanics. The substance is that this person will control your money if you cannot. Michigan law treats an agent under a power of attorney as a fiduciary, with real duties and real accountability.

Under MCL 556.214, some duties cannot be waived: your agent must act within your reasonable expectations to the extent actually known (otherwise in your best interest), act in good faith, act only within the authority you granted, and keep records of what they do. Other, default duties apply unless your document changes them: act loyally for your benefit, avoid conflicts of interest, act with the care a prudent person would use, cooperate with whoever handles your health-care decisions, and try to preserve your existing estate plan.

The Act also builds in oversight. Under MCL 556.216, people with a sufficient connection to the principal, including certain heirs and beneficiaries, fiduciaries, a caregiver, Adult Protective Services, and others specified by the Act, can ask a court to construe the power of attorney or review the agent’s conduct. And under MCL 556.217, an agent who violates the Act can be required to restore the principal’s property; more serious misconduct (embezzling property, wrongfully converting it, or refusing, without a colorable claim of right, to transfer possession of the principal’s property on demand) can expose the agent to liability for treble the value of the property affected. Those are real teeth, and a reason to choose carefully.

The new Act also requires an agent, before acting under a durable power of attorney, to sign an acknowledgment of the agent’s duties (MCL 556.213). Failure to sign the acknowledgment does not invalidate the agent’s authority, but a bank or other person presented with the power may require the acknowledgment before accepting it. For that reason, it makes sense to have the acknowledgment completed and available before it is needed.

The takeaways for choosing: pick someone trustworthy and organized, talk to them first, and name at least one successor in case your first choice cannot serve.

Will a bank actually honor it?

A common frustration under the old law was a bank refusing a perfectly valid power of attorney, or insisting the principal sign the bank’s own in-house form. The new Act pushes back. Subject to several statutory exceptions, a person presented with an acknowledged power of attorney generally must accept it or request specified supporting information within seven business days, and cannot insist that the principal execute the institution’s own form instead. A refusal that violates the statute can lead to a court order requiring acceptance and an award of reasonable attorney fees and costs (MCL 556.219–556.220). It is one more reason to have the document notarized rather than only witnessed.

When a financial power of attorney ends

Under MCL 556.210, a power of attorney ends when you die, when you revoke it, when your agent’s authority ends and no successor is named, on a termination event stated in the document, or as a court orders. One point often misunderstood: a financial power of attorney does not let your agent act after your death. Once you die, the power of attorney ends. Your probate estate is then handled by your personal representative, while property held in trust continues to be administered by the trustee. That is exactly why a power of attorney is only one piece of a plan, not the whole thing.

One Michigan-specific detail worth knowing: if your agent is your spouse, filing for divorce, annulment, or legal separation generally ends that spouse’s authority automatically, unless the power of attorney provides otherwise (MCL 556.210(2)(c)).

The bottom line

A financial power of attorney is the part of an estate plan that protects you while you are alive. Paired with a patient advocate designation for medical decisions and a will or trust for what happens at death, it rounds out a plan that covers all three situations: incapacity, health-care decisions, and death. If you do not have one, or yours predates the 2024 law, it is worth a short conversation to put one in place or confirm the one you have will still do its job.

Frequently Asked Questions

Is a financial power of attorney the same as a will?

No. A will speaks only after you die and directs how your property is distributed. A financial power of attorney operates during your lifetime and can authorize someone to act for you even while you remain competent; if it is durable, that authority can continue if you later become incapacitated. It ends at your death. The two documents cover different situations, and most plans need both.

Does my financial power of attorney cover medical decisions?

No. In Michigan, health-care decisions are handled by a separate document called a patient advocate designation. The financial power of attorney covers money and property only. A complete plan generally includes both.

I signed a power of attorney years ago. Is it still valid after the 2024 law change?

Generally yes, if it was properly executed under the law in effect when you signed it. The 2024 Act does not automatically void older documents. But it is worth having an older power of attorney reviewed to confirm it will still be honored and still reflects your wishes.

Does my agent have to wait until I become incapacitated?

Not necessarily. In Michigan a power of attorney is effective as soon as you sign it unless you provide otherwise, so an immediately effective power can be used while you are fully competent, for convenience or while you travel. You can instead choose a “springing” power that takes effect only if you become incapacitated, but that route requires establishing your incapacity before your agent can act.

Related reading: Michigan patient advocate designation (medical power of attorney) and Will vs. revocable living trust in Michigan.

Please note: This article is provided for general educational and informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship between you and the Law Offices of Maynard F. Newman, P.L.L.C. Michigan’s power-of-attorney statute changed effective July 1, 2024, and the law may change again; confirm the current requirements before relying on any summary. Every situation is different, and you should consult a qualified Michigan attorney about your own circumstances before acting. This content may also be considered attorney advertising.