SB-0092, As Passed Senate, May 3, 2011

SUBSTITUTE FOR

SENATE BILL NO. 92

      A bill to amend 1998 PA 386, entitled

"Estates and protected individuals code,"

by amending section 5501 (MCL 700.5501).

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1        Sec. 5501. (1) A durable power of attorney is a power of

 2  attorney by which a principal designates another as the

 3  principal's attorney in fact in a writing and the writing that

 4  contains the words "This power of attorney is not affected by the

 5  principal's subsequent disability or incapacity, or by the lapse

 6  of time", or "This power of attorney is effective upon the

 7  disability or incapacity of the principal", or similar words

 8  showing the principal's intent that the authority conferred is

 9  exercisable notwithstanding the principal's subsequent disability

 1  or incapacity and, unless the power states a termination time,

 2  notwithstanding the lapse of time since the execution of the

 3  instrument.

 4        (2) An attorney-in-fact designated and acting under a

 5  durable power of attorney has the authority, rights,

 6  responsibilities, and limitations as provided by law, including,

 7  but not limited to, all of the following:

 8        (a) The attorney-in-fact shall act in accordance with the

 9  standards of care applicable to fiduciaries exercising powers

10  under a durable power of attorney.

11        (b) The attorney-in-fact shall take reasonable steps to

12  follow the instructions of the principal.

13        (c) The attorney-in-fact shall keep the principal informed

14  of the attorney-in-fact's actions. On request made at any time,

15  the attorney-in-fact shall provide an accounting to the

16  principal, a conservator or guardian appointed on behalf of the

17  principal, and to others as required by the durable power of

18  attorney, this act, or judicial order.

19        (d) The attorney-in-fact shall not make a gift of the

20  principal's assets, unless provided for in the durable power of

21  attorney.

22        (e) Unless provided for in the durable power of attorney,

23  the attorney-in-fact shall not create an "in trust for", also

24  known as payable-on-death, account, or make, change, or delete a

25  transfer-on-death or payable-on-death designation concerning the

26  principal's assets, if the action would alter the payable-on-

27  death designation.

 1        (f) The attorney-in-fact shall not commingle the principal's

 2  assets with the attorney-in-fact's assets unless provided for in

 3  the durable power of attorney or unless the attorney-in-fact is

 4  the principal's spouse or ancestor or descendant by blood or

 5  adoption.

 6        (g) The attorney-in-fact shall maintain records of the

 7  attorney-in-fact's actions on behalf of the principal, including

 8  transactions, receipts, disbursements, and investments.

 9        (h) The attorney-in-fact may be liable for any loss to the

10  principal for any action taken by the attorney-in-fact on behalf

11  of the principal that is not provided for in the durable power of

12  attorney.

13        (i) The attorney-in-fact may receive reasonable compensation

14  for the attorney-in-fact's services if provided for in the

15  durable power of attorney.

16        (3) Before exercising authority under a durable power of

17  attorney, an attorney-in-fact shall execute an acceptance of the

18  attorney-in-fact's obligations that contains all of the

19  substantive statements in substantially the following form:

20        I, ______________, have been appointed as attorney-in-fact

21  for _________________, the principal, under a durable power of

22  attorney dated __________. By signing this document, I accept

23  that when I act as attorney-in-fact, all of the following apply:

24        (a) I must act in accordance with the standards of care

25  applicable to fiduciaries acting under durable powers of

26  attorney.

27        (b) I must take reasonable steps to follow the instructions

 1  of the principal.

 2        (c) I must keep the principal informed of my actions and

 3  account to the principal or others as required by law.

 4        (d) I cannot make a gift from the principal's property,

 5  unless provided for in the durable power of attorney.

 6        (e) I cannot create an "in trust for", also known as

 7  payable-on-death, account, or make, change, or delete a transfer-

 8  on-death or payable-on-death designation concerning the

 9  principal's assets, if the action would alter the payable-on-

10  death designation, unless provided for in the durable power of

11  attorney.

12        (f) I cannot commingle the principal's assets with my assets

13  unless provided for in the durable power of attorney or unless I

14  am the principal's spouse or ancestor or descendant by blood or

15  adoption.

16        (g) I must maintain records of my transactions as attorney-

17  in-fact, including receipts, disbursements, and investments.

18        (h) I may be liable for any loss to the principal for any

19  action I take that is not provided for in the durable power of

20  attorney.

21        (i) I may be subject to civil or criminal penalties if I

22  violate my duties to the principal.

23	_________________________         Date: ________________
24	(Name)

25        (4) A third party is not liable to the principal or any

26  other person because the third party has complied with

Senate Bill No. 92 as amended April 28, 2011

 1  instructions from an attorney-in-fact named in a durable power of

 2  attorney who has not executed an acceptance that complies with

 3  subsection (3). A third party is not liable to the principal or

 4  any other person if the third party requires an attorney-in-fact

 5  named in a durable power of attorney to execute an acceptance

 6  that complies with subsection (3) before recognizing the durable

 7  power of attorney.

 8        (5) An attorney-in-fact's failure to comply with subsection

 9  (3) does not affect the attorney-in-fact's responsibilities and

10  potential liability to the principal.

11        (6) Subsections (2) <<THROUGH (5)>> do not apply to any of the

12  following:

13        (a) A durable power of attorney executed before April 1,

14  2012. (b) A delegation under section 5103 or a similar power of

15  attorney created by a parent or guardian regarding the care,

16  custody, or property of a minor child or ward.

17        (c) A patient advocate designation or a similar power of

18  attorney relating to the principal's health care.

19        (d) A durable power of attorney that is coupled with an

20  interest in the subject matter of the power.

21        (e) A durable power of attorney that is contained in or is

22  part of a loan agreement, security agreement, escrow agreement,

23  joint venture agreement, license agreement, proxy, shareholder's

24  agreement, operating agreement for a limited liability company,

25  partnership agreement, or other agreement that primarily relates

26  to a similar entity.

27        (7) Subsections (2) to (5) only apply to a durable power of

 1  attorney executed on or after April 1, 2012.