EP. 37 - Michigan's New Power of Attorney Law: Your Crucial Guide

Uncover the secrets of the latest Michigan law changes with Bob Mannor and Kelli King-Penner.

Episode Highlights:
Bob and Kelli emphasize the significance of durable power of attorney, a document enabling individuals to manage financial assets on behalf of someone unable to do so themselves. The episode delves into the nuances of the recently passed law, set to take effect on July 1, 2024.

Insights and Takeaways:

1. Crucial Role of Durable Power of Attorney: They note the document's importance, especially regarding aging and potential challenges like dementia. 
2. Understanding the New Law: Kelli explains the intent behind the new law, part of the uniform power of attorney movement. It seeks to establish consistency and enforceability across states and financial institutions, addressing challenges elder law attorneys face under the old law.
3. The Good and the Bad: Bob and Kelli dissect the positive aspects of the new law, including uniformity and the introduction of an enforcement mechanism. They acknowledge potential challenges but stress the need for a functional and enforceable system for the benefit of individuals and their families.
4. Action Items for Listeners:  Kelli recommends updating power of attorney documents with a qualified attorney to align with the new law, ensuring functionality and compliance. The hosts stress the importance of separate financial and medical power of attorney documents, each governed by statutes.

Why Listen:

This episode serves as a comprehensive guide for individuals, families, and professionals dealing with elder care in Michigan. Bob and Kelli's expertise clarifies the evolving legal landscape, empowering listeners to make informed decisions about their affairs.

Tune in to "Advice from Your Advocates" for insights, actionable advice, and future discussions on vital topics related to elder law and estate planning. Subscribe today on your favorite podcast platform or visit our website to stay informed and empowered.

Host: Attorney Bob Mannor, CELA
Guest: Attorney Kelli King-Penner
Executive Producer: Savannah Meksto
Asst. Producer: Miranda Donaldson

Transcript

Attorney Bob Mannor: 0:00

You're listening to advice from your advocates, a show where we provide elder law advice to professionals who work with the elderly and their families. Welcome back to advice from your advocates. I'm Bob Mannor. I'm a certified elder law attorney in Michigan and Today our guest is the supervising attorney and director of operations Law Group Mannor , Kelli King-Penner.

Attorney Kelli-King Penner: 0:23

Welcome.

Attorney Bob Mannor: 0:24

So we have a very important topic today. This isn't something that you need to know about, so if you live in Michigan, this is very important that you understand the new law that just passed regarding Durable powers of attorney. So first, before we get too far into it, let's talk about what a durable power of attorney is sure.

Attorney Kelli-King Penner: 0:44

So there are lots of different kinds of durable powers of attorney, but we're specifically talking about when we say a durable power of attorney is a Document that allows you to appoint someone else to help manage financial assets for you. So to make sure, your bills are getting paid. Make sure that your assets are being properly managed when, usually when you are not unable to do it for yourself that's typically what we're talking about. Is that financial power?

Attorney Bob Mannor: 1:07

And so a lot of times this is overlooked and people think, oh, I have a form, whatever I can fill that out. The issue is I believe this is the most important legal document. A lot of people are going to say maybe it's the health care power of attorney or patient advocate. Some people would say I will, or a trust. I say the durable power of attorney is the most important document Because in the event that you get sick or becoming Capacitated, it is very important that you have the people you love and trust that can be able to make those decisions for you, make sure your bills are paid and beyond. This is particularly important as we get older, because so many people face some form of dementia before they die.

Attorney Bob Mannor: 1:49

This is not a fun conversation. I understand this right. This is a difficult conversation to think that I might get dementia, or that Kelli might get dementia, or that you might get dementia, but so many people do, and that durable power of attorney is going to be the most important document if that happens. Now let's talk about why we're here. Mm-hmm, I what happened? What's? Is there a new law?

Attorney Kelli-King Penner: 2:11

Yes, there is a new law that's going to be taking effect July 1st, so it's currently been passed. It's been signed by the governor, but it's not effective yet.

Attorney Bob Mannor: 2:18

So to be clear, july 1st 2024.

Attorney Kelli-King Penner: 2:21

Correct July 1st 2024. So what this new power of attorney is aiming to do is it is part of the uniform power of attorney movement, and when we talk about uniform power of attorney, we're talking about consistency. So a lot of states are adopting these uniform laws in order to have consistency in how the law is written across. Now, they're not always fully adopted across states, so the same one here may not be the same one in another state, but they're designed to be fairly consistent. Michigan, in the last couple of years, has made a major push to have the durable power of attorney statute be more uniform. So that's where this law has come out of, and it really came out of a lot of the guardianship reform and a lot of the problems that we, as elder law attorneys and estate planning attorneys, have been kind of facing when it comes to using these powers of attorney. So the goal in mind was to have a new law that was more functional and more likely to be accepted across states and more likely to be accepted in state as well.

Attorney Bob Mannor: 3:20

So our opinion, both Kelli and I, our opinion is that there's some good and there's some bad in this new law. As with all, as with all, most all legislation is that way, right, yep, and so this is important. So we're going to talk about the good first, and you mentioned one the uniformity with other states. That can be helpful, because nowadays, most banks aren't the based in Michigan, right, I mean, the big banks are usually based in some other state, and so it's sometimes harder. The other issue is something that I'm going to have you talk about for a second, because it's what we call enforceability of, or will it be accepted? Will the power of attorney be accepted? So talk to us a little bit about that and why the new law is helpful in that regard.

Attorney Kelli-King Penner: 4:04

Yeah. So to understand that the current law in place does not have an enforcement mechanism. And when I say it doesn't have an enforcement mechanism, I say if we go to ABC Bank, abc Bank can decide we're not going to accept the power of attorney that you have written, despite the fact that it might be properly executed with the state of Michigan. There might be some flaw that they are concerned about, where they're just going to say we're not going to accept it, we're not going to honor it. Well, in those circumstances, we then typically are left with very few options.

Attorney Kelli-King Penner: 4:37

Sometimes we can work it out with the bank, sometimes we have to go seek conservatorship, which is an extreme option that we really try to avoid, but under the current law, there was no enforcement mechanism for us to be like please go through this, let's create a process for that. So the new law is designed to have an enforcement mechanism where, if the bank or the financial institution has some kind of an issue, that they can accept an attorney opinion in order to reduce some of their liability or to reduce their concern over what might happen with it. If they still are uncomfortable with it, there is some court enforcement mechanism behind it. This is new territory, so we'll see how this plays out. This is part of that. We'll see, but it's at least helpful that we have an enforcement mechanism that we have not had previously, so that's at least a step in the right direction.

Attorney Bob Mannor: 5:29

So here's what we believe. Like Kelli said, we don't know how this will be enforced or used in Michigan or interpreted in Michigan yet, because, frankly, with every law, we have to have it be in place and see how it works before we know exactly how it's going to be interpreted. Frankly, however, Kelli and I both have professional network of lawyers throughout the country, and so we both had opportunities to speak and interact with some excellent lawyers throughout the country, and what we've learned from them is, when they do adopt these provisions of enforcement, that it does create that they've had better experiences than we have when there was no enforcement option there, because we were for I don't know. At least 15 years now we've been fighting to make sure that the bank or the financial institution accepts that power of attorney, and it's been a challenge.

Attorney Kelli-King Penner: 6:27

That has been probably the most common estate planning hurdle that I have is the power of attorney and getting that in place with the agent so that it can actually do what it's designed to do. And it's not because the document was drafted poorly or anything related to the law. It's not because it's not the law itself. It really comes down to that enforcement mechanism and banks are based in different states. There's different laws. There's no consistency, so it became very challenging to navigate that environment.

Attorney Bob Mannor: 6:55

So let's talk about some of the challenges of the new law. So one of them and this is what you need to hear so if you watch this, listen to this, this is your takeaway that do you need a new power of attorney? If you already have one and maybe not today because the law hasn't taken effect yet, but sometime in 2024, 2025, is it your recommendation that people update their power of attorney with a qualified lawyer?

Attorney Kelli-King Penner: 7:25

So my recommendation in this circumstance is to do an update. And it's not because there is anything wrong with your existing power of attorney. If it was executed properly under the old law, it is still technically fine. Technically fine isn't always going to be the most functional part of your plan, and really, when we're doing this is.

Attorney Kelli-King Penner: 7:46

I don't want to argue over the technicality of this document. I want to get a plan in front of you that I know is going to be functional and that will actually work. As part of it, would we succeed at arguing on technicality? Probably, but how long is it going to take you and how much money is it going to cost you to get there? Probably a lot less than it would be to meet with a qualified attorney and get an updated power of attorney.

Attorney Bob Mannor: 8:08

And in a minute we'll talk about why we recommend you meet with an experienced, qualified attorney rather than just download a form that might be in compliance with the new law, because we're talking about the usability of it. So this is something that we notice that sometimes people have these documents, they never tried it, they never tried to use it Even some lawyers, frankly. So some lawyers there's different lawyers that do different things and some lawyers are more planning lawyers, so they prepare documents, which, of course, is what we do. But there's some lawyers like us that actually help the family use those documents, and some of the planning lawyers don't actually do the other part of it, where we're involved in helping you use the document, helping you protect assets in the event of medical need, things like that and so, frankly, our documents have changed. The way that we write them, the way that we use them have changed based on our experience of using them with families that needed our help.

Attorney Kelli-King Penner: 9:12

Yeah, absolutely, and especially knowing the subtlety of what's in part of that. Because you might and this is even a difference among practitioners. You ask 21 lawyers what their opinion are. You can get 21 different opinions on it, but it depends on the areas that they're using these powers of attorney. There might be language in a power of attorney that you read it and you're like why would I empower anybody to do that? Well, it might be a specific authority that we, as elder law attorneys, need in order to protect assets from nursing home poverty. So there's reasons for all of these things, but understanding what those reasons are not always evident by the face of the document itself. So you really sometimes need to get good opinions on what's going on.

Attorney Bob Mannor: 9:53

If you've heard us speak before, you may have heard us use the term extraordinary powers. This is very important. Why would you ever need extra or extraordinary powers? And the answer is the vast majority of time where we need those is because now you're going to need. It's usually dementia issue, alzheimer's, that type of a thing but it's often because we need to preserve assets and help you qualify for benefits to pay for home care, assisted living, nursing home.

Attorney Bob Mannor: 10:25

I think, as we get older, that's one of people's biggest fears is that they're going to lose all their money or lose their house to the cost of nursing home care or something like that. And the truth is we can always help you protect your house and other assets from the cost of care and qualify for benefits that would pay for that while we preserve those assets. Here's the problem. We need your permission. Now you're not giving me your permission because you don't know me well enough. You are giving the person you love and trust permission. Okay, so maybe it's your spouse, maybe it's your daughter, maybe it's your son, maybe it's your granddaughter. It's who you love and trust. Okay, you're giving authority to them to go extra and above and beyond to be able to protect those assets. Now, why is that important? Because by the time you need it, you're probably not capable, legally capable, of authorizing it. So you need to pre-authorize these things, and that's what we call an extraordinary power. It is not in them. I've been doing this for 27 years.

Attorney Bob Mannor: 11:33

I guess now you've been doing it for 10, almost 12 years and so in that time period, how many powers of attorney have we looked at 10,000?.

Attorney Kelli-King Penner: 11:43

Easily, easily a thousand.

Attorney Bob Mannor: 11:45

Well, for me, it's way more than that. I mean yeah but the idea is most of them don't have these extraordinary powers in there because most lawyers don't get involved in helping qualify for benefits to pay for home care and nursing home and things like that, and so they don't use those that language and so it's not in there. Is it possible to put that language that we need in the new Uniform Power of Attorney law?

Attorney Kelli-King Penner: 12:11

Yeah, so it is incorporated as part of the law. But here's where it is, I think, dangerous to pursue this without getting some good legal advice is you do have to specifically authorize it and when you read it, because there is a statutory form. That's one thing I don't think we've made clear yet is the new law actually has a form. Power of attorney Forms can be very useful tools. They are tools that you have to use properly, with the right guidance. We're not just, you know, taking a chainsaw to an electrical wire and saying this should be fine. We want to make sure that we're getting proper guidance on that.

Attorney Kelli-King Penner: 12:45

So the forms do authorize it, but you have to. They're not standard in the form. It's not like you sign the durable power of attorney, the uniform one that's provided, and it's authorizing extraordinary powers. You have to specifically authorize those and you may not do it correctly or we may not understand the language and may not even mark it at all. Because we're healthier, we don't have this problem. Why would we authorize anybody to do this? Well, if we don't authorize it now, we may not be able to authorize it later, and that really is going to be a challenge for us as elder law attorneys navigating.

Attorney Bob Mannor: 13:21

So this is really important, and so we've always been able to download a form from the internet or go to office depot and buy forms from them, and we've always recommended against it. So think about this. I know it seems simple because it's piece of paper. We want it to be simple. We're just going to sign it, put our names in there, right? This is everything you've worked for your entire life. This is your IRA. This is your house. This is your savings. This is everything you worked for your entire life. This is protecting your spouse. This is protecting yourself. This is protecting your kids. It's important enough to pay a few hundred dollars to a lawyer to do this Absolutely. It's really easy to make mistakes, and I'm going to give you one example. That's an important one. We're worried about with this form, to the extent that people will authorize too many powers or not enough powers, and I think that it's very likely that that will be the standard that people will do that Now, right now, as before, this new law takes effect.

Attorney Bob Mannor: 14:15

If we don't have a proper power of attorney, or we don't have any power of attorney at all, we can go into court and ask a judge for permission to do the things that we need to do, since the person that doesn't have the power of attorney, or doesn't have a proper power of attorney, since they don't have capacity to sign a new one, sometimes we have to go to court and get permission from a judge. Here's where the problem comes in. If you fill out that power of attorney wrong, a judge may not substitute that judgment. Even though you may or may not have understood what you were signing or which options you were choosing, the judge may look at that and say we have something in writing that says what their intent are.

Attorney Bob Mannor: 14:56

I, as a judge, am not going to overrule that, and then we may have real trouble because we might not be able to protect your assets, protect your spouse, protect your house, things like that. I just think it's very important Come see us, come see a qualified attorney. Certainly, if you're in the state of Michigan, this goes for people outside of the state too. It's just that they may or may not be a new law in your state, but in Michigan there's the new law. When and I'm suggesting possibly after it takes effect when should they come in and sign a new power of attorney?

Attorney Kelli-King Penner: 15:29

I mean you should really do this on a routine basis as far as having your documents looked at. But I would say, when that new law is effective, it doesn't hurt to revisit your attorney, certainly not something you wanna put off, because we never know what a crisis is necessarily going to happen. Today we have health, we have longevity. What does tomorrow hold for us, and especially when it comes to your health? There's just nothing guaranteed with it.

Attorney Kelli-King Penner: 15:53

So not that you need to rush out and have a make an appointment on July 1st, but you definitely wanna make this a priority to have your estate plan revisited and I can't echo this enough when it comes to not just the durable power of attorney Obviously that's what we're talking about but you should have your estate plan regularly looked at. I mean you yourself should look at that at least once a year and have it regularly reviewed with an attorney, but also if there is something going on with your life, that there's been a recent diagnosis, there's been some kind of family issue that's coming on, you need to pull out those documents and look at them as soon as possible, but I would definitely not delay this as far as putting it on the back burner, or I'll someday get to that. Really, I would absolutely do it within the next year after this law becomes effective, but ideally you wanna have that looked at as soon as possible.

Attorney Bob Mannor: 16:42

So I wanna spend 20 seconds just addressing our clients, the clients of Manor Law Group. There's been significant changes of the law in the past few years and we always try to contact all of our clients, let them know about the change in the law. We will be doing that for our clients of Mannor Law Group at least all the ones that we have their updated address and things like that but we won't be doing it until after July first. So sometime this year you'll get some contact from us with some instructions as to what's the best way to handle this, but we won't be doing that until after July. I wanna point out one other thing that people sometimes get confused about. They hear the word power of attorney and some people don't make a distinguished. They don't distinguish between your financial power of attorney it's usually called a durable power of attorney and your medical power of attorney, sometimes called a patient advocate. Are they the same thing? Can they be the same thing?

Attorney Kelli-King Penner: 17:39

So they are not the same thing there's actually, and especially after this new law, they're gonna be dictated or controlled by different statutes. So the healthcare power of attorney is controlled by the estates and protected individuals code. It is a patient advocate designation. When it talks about it in terms of that, what we mean is healthcare power of attorney. So patient advocate designation, healthcare power of attorney, those are the same thing. They have different rules. They even have different execution rules for how they have to be signed. The financial power of attorney is going to operate under this new statute, which is the uniform, durable power of attorney statute. That will control that.

Attorney Kelli-King Penner: 18:17

They should not be the same document. I occasionally will see them in those 10,000 documents that we've reviewed. I occasionally have seen them as a combined because they are controlled by different laws. I never really wanna see them combined and I also think that causes confusion for the places that need to accept them as well, because if they're looking for specific boxes to check off and say, okay, if they have this, they have this, they have this and they see something kind of out of the ordinary for that, that causes concern for them where they're more likely to reject it, which causes delay issues. So that's time, that's money, that's havoc for our family. I would not recommend that those be combined within one document. So if you look and see and they are combined within one document, I would consider having that looked at and updated, simply from a clarity purposes. Also, sometimes those people are not suited to make the same types of decisions.

Attorney Bob Mannor: 19:10

Good point.

Attorney Kelli-King Penner: 19:11

Your financial agent and your medical agent might be two different people, and if you're trying to accomplish all of those in one document, that gets to be really complicated and confusing. I think it's also rare that I would ever see this. Married couples should have individual ones. I shouldn't see a joint power of attorney for married couples? I have seen it. I think it's confusing and I think it's more likely to cause problems 100%.

Attorney Bob Mannor: 19:34

That should not be the case. So you shouldn't try to combine the healthcare power of attorney or patient advocate with the financial power of attorney or durable power of attorney. Those are two separate documents and they're both very important. We call those the lifetime documents. Frankly, we think anybody over 18 years old should have them if you've got somebody you love and trust. If you got nobody that you love and trust, then great, then I guess we're gonna have to rely on a court to appoint a stranger to do it. Potentially, or maybe not a stranger, but the court will ultimately have to appoint somebody if you're not capable of making your own decisions. That's why it's so important, cause most of us do have people we love and trust. Now what if you have somebody you don't trust? Should we put them as your power of attorney just cause they're your son? Absolutely not. No, maybe from medical, if you're comfortable with that, but we're not gonna put somebody that's not trust literally with money in charge of money. Okay.

Attorney Bob Mannor: 20:25

One last point, and then we'll close up for today. You're not giving up anything when you sign a power of attorney. Okay, you're saying someone else that you trust and love also has the authorization, if they need it to pay a bill, to move money around if we need to. You are not giving that up. You still have that right and you will still continue to use that. It's just that this is so that we have it in place before you need it, and so it doesn't mean you're giving up anything. You know whether it's the financial or the medical. You're not giving up the right to make your own decisions by any means.

Attorney Kelli-King Penner: 21:02

I think that's one of the reasons why we actually push really hard for less restrictive documents. So powers those lifetime documents are actually less restrictive on you as a person because it's enabling you to maintain those authority over yourself. You're still able to make decisions for yourself. You're still able to change those documents for as long as you have capacity to do so. You maintain control. If we have to escalate that to a more restrictive environment like a guardianship or a conservatorship, that's where we're really looking at losing some autonomy over ourselves and some control. So it's really important to have those powers of attorney in place, even if you think, okay, I don't have.

Attorney Kelli-King Penner: 21:44

I'm healthy, everything's fine, or this is one that I typically get, especially for people my age. I don't have anything. You have more than you think. I can guarantee that. But also you have yourself and you wanna maintain that autonomy, that control over your own kind of being. Powers of attorney really empower you to do that, and that's what I think is. Sometimes people don't think about it in terms of that, but really it is allowing you to dictate what you want for yourself.

Attorney Bob Mannor: 22:10

Well and that's an excellent point that you made about well, I don't have anything. We often recommend these for 18 year olds. When somebody's 18, they're a legal adult. Their parents can't help them anymore. They can't get access to information anymore. So if you're an unit for anybody over 18, whether it's your child, your grandchild, anything like that if they don't have these documents, they could be that we have to run into court. So court is where they take away your authority. A power of attorney is where you're still in control and you're deciding who will be able to help you, and so that's really important to remember that this is. We call it a financial power of attorney, but really it's illegal and financial. There's a lot of legal decisions that need to be made too, that have nothing to do with finances, which is why we want anybody over 18 to do these.

Attorney Kelli-King Penner: 22:56

Absolutely, and they are one of. Like you mentioned earlier, they're one of the most important estate planning tools that you have, and it is truly for anybody 18 years and older. So once you are a legal adult, this is really something that you should do.

Attorney Bob Mannor: 23:11

So thank you for joining us today, Kelli, and what we're gonna do. I'm gonna give you two action items. One is later this year so probably in the third or fourth quarter of 2024, inquire about getting an updated power of attorney so that it's more likely that it'll be accepted when you need it, when the person you love and trust needs to help you out. The second is to subscribe to the podcast, and you can subscribe at any of the services that offer podcasts, or you can go to our website, which is mannorlawgroup. com, and go to the website or the podcast page and subscribe there. Thank you, Kelli. This was great information and appreciate your time. We will be doing a separate one on healthcare, powers of attorney and patient advocates, so look for that one too.

Attorney Kelli-King Penner: 23:59

you so .

Attorney Bob Mannor: 24:11

Thanks for listening.

Attorney Kelli-King Penner: 24:12

To learn more, visit mannorlawgroup. com.