Key Concerns Blog

Sharing our passion of finances and food.

Don’t Overlook Michigan’s New Durable Power of Attorney Law

Posted on September 18, 2012 in Articles

During this election cycle you will hear a great deal about the Bush tax cuts that are set to expire on January 1, 2013. This includes expiration of the current $5 Million Federal Estate Tax Exemption that will be reduced to $1 Million, while the tax increases to 55%.

In reality, though, the Federal Estate Tax does not affect very many people. A change in Michigan law on May 23 relative to Durable Power of Attorneys, however, has the potential to affect every Durable Power of Attorney in Michigan.

A Durable Power of Attorney (DPOA) is a very common Estate Planning document that is used to give an Agent the authority to handle your finances if you become incapacitated. If you become incapacitated, your Agent can take your DPOA to the bank and access your accounts in order pay your bills and manage your finances.

Michigan’s new Durable Power of Attorney law now requires all DPOAs executed after October 1, 2012 to include specific language setting forth the responsibilities of the Agent, and requires the Agent to sign a written acknowledgment of those responsibilities before they can act under the DPOA.

Although the law specifically applies to DPOAs executed after October 1, 2012, we expect that this new requirement will, also, impact current DPOAs. We are concerned that banks and other financial institutions, where DPOAs are most commonly used, will not distinguish between DPOAs that are prepared before or after October 1, 2012, but will simply stop accepting DPOAs that do not include the appropriate acknowledgment of responsibilities signed by your Agent.

If a bank refuses to accept your current DPOA when your Agent attempts to use it, the problem at that time is that you are already incapacitated and, therefore, you are unable to execute a new DPOA that complies with the new law. Consequently, your Agent will not have authority to manage your finances, as you had intended.

The good news is that most current DPOAs can be made compliant with the new law by having an Acknowledgment of Responsibilities that complies with the new statute attached to the DPOA. Your Agent then simply has to sign and date the Acknowledgment of Responsibilities.

Another change under the new law that might affect some DPOAs is the requirement that if you want your Agent to be paid for serving under the DPOA, such payment has to be specifically authorized in the DPOA. While most clients appoint spouses, children or friends to serve as their Agent without expectation of payment, this new requirement would affect a DPOA appointing a bank or professional who expected to be paid.

-Written by Tom Doyle, of Doyle Law, PC. He is the attorney we work with that specializes in Estate Planning.

Marshmallows and Money

Posted on June 18, 2012 in Articles

In the 1960’s, a man named Walter Mischel from Stanford University created an experiment.  He took four-year-olds, sat them in a chair, and put a marshmallow in front of them.  They were told that they could eat the marshmallow, or they could wait 20 minutes.  If they waited twenty minutes, they would receive a second marshmallow.  About two-thirds of kids ate the first marshmallow.  The other third waited the 20 minutes and were rewarded with a second marshmallow.

The experiment followed the kids throughout their childhood.  A follow-up study ten years after the initial study showed that the kids who were able to wait for the second marshmallow were described by their parents and teachers as more competent and better adjusted than kids who did not.  In addition, those same kids averaged 210 points higher on their SAT tests than kids who did not wait for the second marshmallow.

I would be willing to bet that the kids who were able to wait for the second marshmallow are probably better long-term savers than the majority of kids who ate the marshmallow.  Although it is not a popular concept in today’s culture, delayed gratification is the ultimate personality characteristic in preparing for retirement, especially for those who have defined contribution (401(k) and 403(b)) plans versus those who have defined benefit (pension) plans.

There has been a great deal of discussion lately that a 401(k) plan does not replace a pension in retirement.  While I would generally agree that a company offering a pension is a company that you might seriously want to consider staying with, a 401(k) plan works fine for the one-third of the population that can wait for the second marshmallow.

For example, the West Virginia Teacher’s pension was severely underfunded.  Looking to get away from some of the pension obligations, all incoming teachers from 1991 onward were placed in a 401(k) plan.  Teachers who had been in the profession before then were given the option of staying in the pension plan or opting into the 401(k) plan.  Many did opt into the 401(k) plan thinking that they could use market returns to out-perform the pension plan and have more money in retirement.

Those who opted for the 401(k) plan did miserably, to say the least.  Many blamed the stock market crash of 2008, but that wasn’t even to blame.  Before the crash, most teachers age 60 or older had $100,000 or less in their 401(k).  While a teacher in West Virginia may think $100,000 is a lot of money, it is nowhere near enough to sustain their lifestyles in retirement.  A teacher with 30 years of experience would need $323,400 in their 401(k) plan at the time of their retirement to equal the benefit provided by the pension.

Now, following the stock market crash of 2008, those over 60 have an average of $23,193 in their 401(k) plan.  Had they stayed in the pension plan, they would have received $27,000 per year for the rest of their lives.

Is the stock market to blame?  Did the state of West Virginia treat their teachers poorly?  Or are the teachers just a reflection of the one-marshmallow crowd?  Most 401(k) plans offer loan provisions, and there are penalty-free distributions that can be taken for things such as a down payment on a first home and qualified educational expenses.  In addition, divorce settlements allow one-time distributions, and some people just take out money and pay the penalty.  My experience in working with clients with 401(k) plans tells me that anybody who has been working for over 30 years and only has $23,000 in their 401(k) is not the victim of the stock market, but is the victim of their own inability to leave the money in their 401(k) until they retire.

Albert Einstein said, “Those who understand compound interest are destined to collect it.  Those who do not are destined to pay it.”  This is how 401(k) plans work: money is invested consistently, and, with proper management, grows over time. Then that growth grows, and so on, and so on.  If you take a loan, early distribution, or stop contributing, that growth stops.   If you want your 401(k) plan to work for you, join the two-marshmallow crowd and leave that money alone.


Homemade Marshmallows

Posted on in Recipes

Courtesy of


  • 3 packages unflavored gelatin
  • 1 cup ice cold water, divided
  • 12 ounces granulated sugar, approximately 1 1/2 cups
  • 1 cup light corn syrup
  • 1/4 teaspoon kosher salt
  • 1 teaspoon vanilla extract
  • 1/4 cup confectioners’ sugar
  • 1/4 cup cornstarch
  • Nonstick spray


Place the gelatin into the bowl of a stand mixer along with 1/2 cup of the water. Have the whisk attachment standing by.

In a small saucepan combine the remaining 1/2 cup water, granulated sugar, corn syrup and salt. Place over medium high heat, cover and allow to cook for 3 to 4 minutes. Uncover, clip a candy thermometer onto the side of the pan and continue to cook until the mixture reaches 240 degrees F, approximately 7 to 8 minutes. Once the mixture reaches this temperature, immediately remove from the heat.

Turn the mixer on low speed and, while running, slowly pour the sugar syrup down the side of the bowl into the gelatin mixture.

Once you have added all of the syrup, increase the speed to high. Continue to whip until the mixture becomes very thick and is lukewarm, approximately 12 to 15 minutes. Add the vanilla during the last minute of whipping.

While the mixture is whipping prepare the pans as follows.

For regular marshmallows:

Combine the confectioners’ sugar and cornstarch in a small bowl.

Lightly spray a 13 by 9-inch metal baking pan with nonstick cooking spray. Add the sugar and cornstarch mixture and move around to completely coat the bottom and sides of the pan. Return the remaining mixture to the bowl for later use.

When ready, pour the mixture into the prepared pan, using a lightly oiled spatula for spreading evenly into the pan. Dust the top with enough of the remaining sugar and cornstarch mixture to lightly cover. Reserve the rest for later. Allow the marshmallows to sit uncovered for at least 4 hours and up to overnight.

Turn the marshmallows out onto a cutting board and cut into 1-inch squares using a pizza wheel dusted with the confectioners’ sugar mixture. Once cut, lightly dust all sides of each marshmallow with the remaining mixture, using additional if necessary. Store in an airtight container for up to 3 weeks.