Report urges Michigan to adopt stronger laws preventing power of attorney abuse

Published 10:02 pm Monday, December 15, 2008

By Staff
LANSING – Michigan state laws lack protections for individuals creating financial powers of attorney, according to a report released Dec. 5 by AARP's Public Policy Institute.
Presented at the eighth annual National Aging and Law Conference, the report urges state legislatures to adopt the Uniform Power of Attorney Act (UPOAA), a model law that lays the groundwork for keeping seniors safe from abuse, while allowing them to plan for the future.
A power of attorney is a legal document used by an individual to empower someone else to act on their behalf, and often is aimed at allowing the appointed agent to act when an older person no longer can.
"As Michiganians age, the power of attorney will be used more often to appoint trusted family members or others to handle financial decision-making – but it also can be a 'license to steal' because it grants broad powers with little oversight," said Eric Schneidewind, AARP Michigan state president. "Our existing laws must be improved to insure Michiganians are protected financially and legally as they age."
The report, "Power of Attorney Abuse: What States Can Do About It," compiled by the American Bar Association Commission on Law and Aging, under contract to AARP, comes as legislatures in 12 states, including Michigan, consider adopting the law in 2009.
It includes individual comparisons of current state laws with the UPOAA and advocacy tips to assist advocates and policymakers to adopt the UPOAA or similar law reform measures.
Following a 2002 national survey that found a need to improve state laws to better protect incapacitated individuals and improve acceptance of power of attorney by third parties, in 2006 the Uniform Law Commissioners drafted the UPOAA.
The three-year effort included involvement of and input from bankers, the American Bar Association (ABA) and consumer groups such as AARP.
"Though in many cases, POAs enhance autonomy of seniors, they also give a great deal of authority to their agents – those trusted to execute the POA responsibly," said Joseph O'Connor, chair of the American Bar Association Commission on Law and Aging.
"There is very little regular oversight and no clear standards for agents. The UPOAA sets a benchmark against which states can enact laws to protect the financial security of older Americans."
Though two states – New Mexico and Idaho – have adopted the full UPOAA, the report shows only a small number of states have provisions that are identical, equivalent or substantially similar to UPOAA:
Only four states have adequate provisions regarding an agent's mandatory duties.
Only eight states have adequate provisions requiring specific grant of "hot powers" – those with high propensity for dissipating property or altering estate plans
Only four states have adequate provisions on agent liability.
In addition to Michigan, in 2009, legislatures in Colorado, Georgia, Indiana, Maine, Maryland, Nevada, Ohio, Oregon, Pennsylvania, Virginia and Wisconsin will consider adopting the law.