Maryland Power of Attorney Guide

A power of attorney (POA) is a vital legal instrument in Maryland that enables individuals to appoint a trusted agent to manage their affairs when they cannot do so themselves. This guide explores the fundamentals, recent legislative changes, creation processes, and practical considerations under Maryland law.

Fundamentals of Powers of Attorney in Maryland

Powers of attorney empower a principal to delegate decision-making authority to an agent for financial, property, or personal matters. Maryland’s framework, primarily governed by the Maryland General and Limited Power of Attorney Act in Md. Code Estates & Trusts Title 17, presumes durability unless specified otherwise, meaning the POA remains effective during incapacity.[10]

Key benefits include streamlined handling of assets during illness or travel, avoidance of court-appointed guardianship, and flexibility in planning for future needs. Without a POA, family members may face prolonged probate court processes to gain authority, which can be costly and time-consuming.

Types of Powers of Attorney Available

• General POA: Grants broad authority over business and personal matters, such as banking and contracts, but typically ends upon the principal’s incapacity.
• Limited or Special POA: Restricts authority to specific tasks, like selling a property or handling a single transaction.
• Durable POA: Continues in effect if the principal becomes incapacitated; the default under Maryland law.[10]
• Springing Durable POA: Activates only upon a triggering event, such as a doctor’s certification of incapacity.
• Statutory Form POA: Uses predefined templates from Md. Code §§ 17-201 to 17-204 for standardized powers, simplifying acceptance by institutions.

Choosing the right type depends on the principal’s circumstances, with durable statutory forms being most common for comprehensive protection.

Recent Legislative Evolutions in Maryland POA Law

Maryland has actively updated its POA statutes to enhance flexibility and reliability. The 2010 Act introduced statutory forms, followed by 2017 expansions via House Bill 1095, which broadened default agent powers including gifting, disclaiming property, and altering beneficiary designations unless explicitly limited.

The most significant overhaul came on October 1, 2023, with SB 851/HB 18 (Chapters 697 and 696), revising the Maryland Statutory POA form. This update expands agent capabilities without invalidating prior POAs, encouraging reviews for optimal coverage.

Expanded Powers Under the 2023 Statutory POA

The 2023 Maryland Statutory POA significantly bolsters agent authority on an opt-in basis, covering areas previously needing addendums. Agents may now:

• Make gifts for public assistance qualification, aiding Medicaid eligibility.
• Buy/sell motor vehicles, boats, planes, and untitled personal property.
• Manage trusts, probate estates, escrows, or custodianships where the principal is a beneficiary.
• Appoint successor agents and create joint accounts.
• Seek court or agency assistance, hire professionals, and file protective documents.

Compensation shifted: Agents are now entitled to reasonable pay unless the document explicitly states otherwise, a change from prior reimbursement-only rules.

Step-by-Step Guide to Creating a Valid POA

Executing a POA in Maryland demands strict compliance for enforceability. Core requirements include:

1. Written Document: Use the statutory form or a customized version clearly outlining powers.
2. Principal’s Signature: Signed by the principal or at their direction in their presence; competence is required.
3. Notarization and Witnesses: Acknowledged before a notary; two witnesses present during signing (notary may count as one).
4. Digital Options: Electronic signatures permitted since 2017, with remote options under specific conditions like attorney supervision.
5. Attorney Certification (for Remote): Supervising attorney verifies identities, creates a certified paper copy with original signatures noted.

For remote executions, all parties must be in physical or electronic presence, and the principal must be in Maryland. Executive Orders from the pandemic era (e.g., 20.04.10.01) validated certain remote POAs if compliant.

Obligations and Liabilities for Agents

Agents must act loyally, in the principal’s best interest, avoiding self-dealing. Expanded powers demand careful exercise, especially gifting, which requires prudence for tax and benefit implications. Maryland law holds agents accountable for breaches, potentially via court surcharge or removal.

Third parties cannot demand alternative forms for statutory POAs and must notify agents of refusals, facing liability for attorney’s fees, damages, and penalties if they improperly reject a valid document.

Third-Party Acceptance and Dispute Resolution

Banks and institutions must honor valid statutory POAs without extras like new forms. Refusals trigger notification duties and expose the party to lawsuits for compliance costs. Out-of-state POAs are acceptable if compliant with Maryland rules.

If challenged, courts enforce POAs under Md. Code §17-104, awarding fees against non-compliant parties.

Practical Tips for Principals and Agents

• Review Existing POAs: Post-2023, update to leverage new powers without invalidating old ones.
• Select Trusted Agents: Name successors and provide copies to key institutions.
• Coordinate with Estate Plans: Align with wills, trusts for seamless management.
• Seek Professional Help: Attorneys ensure compliance amid nuances like remote signing.
• Monitor Changes: Track legislative updates via official Maryland resources.

Frequently Asked Questions (FAQs)

Does a pre-2023 POA remain valid?

Yes, prior POAs are not invalidated but may lack new powers; review recommended.

Can POAs be signed electronically?

Yes, digital signatures are allowed with notarization and witnesses since 2017.

What if a bank refuses my POA?

They must notify you and can be sued for fees and damages.

Is agent compensation automatic?

Now yes for reasonable amounts unless document specifies no pay.

Can a POA handle medical decisions?

Financial POAs cover property; separate advance directives needed for health.

Conclusion: Empower Your Future with Proper Planning

Maryland’s evolving POA laws offer robust tools for autonomy. By understanding types, updates, and execution, individuals can safeguard assets effectively. Consult legal experts for tailored advice.

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medha deb

 

Medha Deb is an editor with a master's degree in Applied Linguistics from the University of Hyderabad. She believes that her qualification has helped her develop a deep understanding of language and its application in various contexts.

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