Maryland Power of Attorney
Prepare your family in case a loved one become incapable
Maryland Power of Attorney Lawyer
Do you ever wonder what would happen if you suddenly became unable to do anything on your own behalf? It’s frightening what could happen to your family, your finances, and your business.
Maryland estate lawyers usually include a power of attorney in estate planning documents. We do this because almost everyone needs one.
What Is a Maryland Power of Attorney?
A Maryland power of attorney permits another person to act on your behalf. There are several types of powers of attorney. You should know what type of power of attorney will cover your needs.
You can call the person you appoint either your agent or your attorney-in-fact. The person who creates a power of attorney in Maryland is its principal. The document is a power of attorney or POA.
We’ll explore why having a power of attorney is important for you and your family, the types of powers of attorney, the common clauses, and how to create a power of attorney.
Who needs a power of attorney?
You arguably need a power of attorney once you turn 18 years old and your parents can no longer act as your guardian. Of course, it really becomes necessary once you have responsibilities.
If you have bills to pay, banks to contact, family to care for, businesses to run, then you need someone to handle those things in your absence. Even when you recover your abilities, your family, finances, and business could be in turmoil. A power of attorney allows your agent to manage your affairs and hold things together during your incapacity.
Everyone could need a power of attorney. Adults who have children, are older, or who have health issues absolutely should have one. You could also want to have a power of attorney for practical reasons. Your job may take you away from home for extended periods. You could give a friend or family member a limited power of attorney to assist with financial and other matters temporarily.
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What are the types of powers of attorney?
Your Maryland power of attorney lawyer can suggest either a general or a limited power of attorney.
Maryland General Power of Attorney
Your agent can take actions on a broad range of financial and legal matters with a general power of attorney. You will want this type of power of attorney for emergencies and health issues. A Maryland estate lawyer would likely give you a general power of attorney as part of an estate planning package with your last will and testament.
Maryland Limited Power of Attorney
You should get a limited power of attorney in Maryland if you only want your agent to handle specific matters or for a limited time. For instance, if you plan to be away when selling your house, you could grant a limited power of attorney to someone. It could allow them to handle the real estate sale and related matters. Your power of attorney lawyer likely would not suggest you give that agent a general power of attorney.
You can specify whether the power of attorney is durable or non-durable:
Durable Power of Attorney
Durable powers of attorney remain in effect even if the principal becomes mentally incapacitated. If planning for long-term disability, you need this kind of power of attorney. Your estate planning attorney would likely provide you with a durable general power of attorney.
Non-Durable Power of Attorney
Non-durable powers of attorney have limited use. They terminate if you became incapacitated. But they can still be useful. You may, for instance, want to allow a financial advisor to make decisions for recurring matters. But you may want that power of attorney to end if you can no longer monitor them. That could be a time when you could use a non-durable power of attorney.
You can choose whether the power of attorney will be immediately effective or springing:
This grants the agent to ability to use the power of attorney even if you remain capable of making decisions for yourself.
Springing Power of Attorney
A springing power of attorney allows the agent to use it after meeting requirements. The power of attorney document may require a medical doctor declare you incapable before your agent can use it.
Choosing between Immediately Effective and Springing is a personal decision. You can be concerned since a general power of attorney provides the agent with broad financial authority. Making it Springing may, however, create issues since doctors often decline making a declaration about your capacity.
Alternatively, you could create an Immediately Effective power of attorney but keep it stored until your agent needs it.
Each of the above primarily regards what we call a financial power of attorney. Another type would be a medical power of attorney:
Medical Power of Attorney
You may consider a medical power of attorney to be a completely different type of document from a general power of attorney. They address two different issues and have little in common. You need both.
A medical power of attorney grants your agent the authority to make medical decisions on your behalf if you are incapable. Your estate planning attorney usually provides a medical power of attorney. The medical power of attorney likely grants the ability to access medical records in addition to authority to act on medical decisions. Your estate attorney could also provide you with a living will or advance healthcare directive. It works together with the agent’s authority to act under the medical power of attorney with your specific requests for medical decisions.
What can a Maryland power of attorney do?
Your power of attorney can allow your agent to do almost anything on your behalf that you choose to put into it. By design, a durable general power of attorney usually gives your agent authority to act on just about everything. They can manage your finances, write checks from your bank account, file your taxes, refinance your house, and more. Maryland estate planning attorneys provide this type of power of attorney, since it allows your family to help in an emergency or if you have a medical issues. This is by design.
If, for instance, you had an accident and became incapacitated; you need someone to handle those things for you and hold things together for you until you become able. If you believe the principal may need long-term care, it’s important that the power of attorney gives the agent permission to make gifts. This will allow the agent to qualify you for Medicaid and protect your assets with the guidance of an elder law attorney.
What can a Maryland power of attorney not do?
Your power of attorney document must grant the agent the right to do something or they can’t do it. That’s as simple as it gets, right? We create limited powers of attorney intending to limit them. There could be issues, however, if a general power of attorney leaves out necessary powers.
Make sure your power of attorney covers everything you need. Your attorney may help identify special situations your general power of attorney needs to address. Thankfully, lawyers usually provide general powers of attorney that cover more than what you will need.
The agent also has fiduciary duties to the principal, meaning Maryland law expects your agent to act in your best interests. That fiduciary duty means they cannot abuse their power by making reckless decisions or stealing from you. Of course, choosing someone you can trust will be your best defense against something like this happening. You don’t want to rely upon the law to make things right.
Will a power of attorney protect your business?
A power of attorney can grant the agent your rights as an individual, not as an officer of the business. If you own a business, then your agent can assume your rights as the owner, meaning they may approve things as a member of an LLC or shareholder in a corporation. This may not be sufficient for actually running the company.
The LLC or corporation’s documents can determine what happens if you become incapable. Those documents may name a person who will take over. They may state whether you remain an owner or if the business will purchase your shares or membership interests. This is not necessarily a bad thing. Having a business succession plan could cause this to happen. A business succession plan ensures that the business continues and keeps its value for you and your family.
You should have a business succession plan to make a smooth transition. The answer to this problem may not be your spouse showing up at your business, power of attorney in hand. Both your business and estate planning lawyers need to be involved in protecting your company.
When does a power of attorney end?
A power of attorney can terminate for several reasons:
- Your power of attorney document may state when it ends
- You may revoke the power of attorney
- All powers of attorney end upon your death
You should inform your agent and others relying upon a power of attorney if you revoke it.
Common Questions about a Maryland Power of Attorney:
We answer many client questions regarding powers of attorney as part of our Maryland estate planning attorney services. We answer some of the more common questions below.
Can you change a power of attorney?
You usually can change a power of attorney whenever you want. If you become disabled and lose legal capacity, then you lose your ability to create, change, or revoke a power of attorney. Your family can ask a court to remove a person as your agent if for good cause. Another rare exception would be if you grant a power of attorney as part of a contract or other agreement. You usually cannot change or revoke that type of power of attorney without consent.
Can I still use my power of attorney after the person dies?
When a person dies, any power of attorney they granted dies as well. The agent should immediately stop using the power of attorney. Maryland law transfers that person’s rights to their estate. The estate’s personal representative will be the only person who can use those rights. So, if a check needs to be written on the deceased’s behalf, then the personal representative needs to do it.
Can I give someone a power of attorney temporarily?
People commonly grant powers of attorney so another can act on their behalf for a transaction or for a limited time. For instance, you may sell your home in Smithsburg on a day you’ll need to be in Timonium. You can grant a friend a limited power of attorney to attend the Smithsburg closing for you. You can grant the friend a limited power of attorney for that one real estate sale with no other powers.
Does a power of attorney need to be notarized in Maryland?
Maryland law requires you to have two witnesses and a notary when signing a power of attorney, as stated in Maryland Code Estates & Trusts §17-110. This applies to both a financial power of attorney and medical powers of attorney. An estate planning attorney in Maryland usually provides a notary when you sign your estate planning documents.
How many originals of my power of attorney should I have?
You should have at least three originals of your power of attorney. Some people will demand an original, not a copy. You should tell your agent they should only let them view the original and demand to receive it back. So, if a bank demands an original, hand them the original so they can copy it. Then tell them you will camp in their lobby until you get it back.
If you become incapable of signing any more powers of attorney, then those originals you signed will be priceless to those managing your affairs.
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Our CPA recommended Jeff to help us with our estate planning and transferring our business to our kids. Jeff was a friendly guy and understood the business and personal issues we were concerned about with giving the business to our kids. He came up with a great plan that reduced the taxes and made sure the business would stay open after we retired. We think our estate plan we made with Jeff will really help our family after we're gone. We are happy our CPA recommended him and with the work Jeff did for us. - Tom D.