Maryland

Finance

Instrument: Personal Financial Power of Attorney (POA)

What is it for?
The POA allows an adult (the “principal”) to authorize one or more “agents” to make financial decisions on his or her behalf. The POA does not cover health care decisions. Md. Code Ann., Est. & Trusts § 17-109(b)(2).

What does it do?
Unless stated otherwise in the POA, agents are generally presumed authorized to take certain types of actions, such as contracting or suing on the principal’s behalf or accessing communications intended for the principal. Md. Code Ann., Est. & Trusts § 17-202.

In exercising the authority granted by the principal, an agent also must act loyally, avoid conflicts of interest, and act with care, competence, and diligence consistent with a fiduciary duty. An agent is not liable if the principal’s property declines as a result of the agent’s actions absent a breach of this duty. Md. Code Ann., Est. & Trusts § 17-113.

Third parties are generally obligated to accept decisions by an agent duly appointed by a POA. Md. Code Ann., Est. & Trusts §§ 17-104, 108. A third party may, for example, request the agent to provide a certification of the agent’s authority. Md. Code Ann., Est. & Trusts § tbd. Maryland provides a statutory certification form at Md. Code Ann., Est. & Trusts § 17-204.

How does one make it?
A POA must be in writing and signed by the principal or in the principal’s physical presence by another individual expressly directed by the principal to sign the principal’s name. Md. Code Ann., Est. & Trusts § 17-110(a)(1-2). The signature may be either witnessed by two adult witnesses or be notarized by a single notary public. Md. Code Ann., Est. & Trusts §§ 17-110(a)(4), (b). The POA document must also contain certain notices to the principal and the agent that substantially conform with those provided at Me. Rev. Stat. Ann. tit. 18-C § 5-905(2).

When does it come into effect?
A POA is effective when executed unless the principal provides in the POA that it becomes effective at a future date or upon the occurrence of a future event or contingency. Md. Code Ann., Est. & Trusts § 17-111(a).

If a POA becomes effective upon the principal’s incapacity, the principal may authorize a specific person to determine whether the principal is incapacitated. Md. Code Ann., Est. & Trusts § 17-111(b). If not, then the POA becomes effective upon a written determination of incapacity by a physician or an attorney, judge, or another appropriate government official. Md. Code Ann., Est. & Trusts § 17-111(c).

For the purposes of an incapacity determination, “incapacity” means “the inability of an individual to manage property or business affairs because the individual” satisfies the criteria for appointing a guardian of the property. Md. Code Ann., Est. & Trusts § 17-101(g). A court may appoint a guardian of the property if the “person is unable to manage effectively the person’s property and affairs because of physical or mental disability.” Md. Code Ann., Est. & Trusts § 13-201(c)(1).

The POA is presumed to be “durable” (i.e. presumed to survive the principal’s incapacity) unless it expressly provides that it is terminated by the incapacity of the principal. Md. Code Ann., Est. & Trusts § 17-105(c).

How long does it last?
The POA generally lasts until either the principal revokes it; the principal dies; the agent dies or becomes incapacitated or resigns; or upon the POA’s termination date, if one is provided. Md. Code Ann., Est. & Trusts § 17-112.

Note that the execution of a subsequent POA does not automatically revoke any prior POA unless the subsequent POA expressly states that the prior POA(s) is/are revoked. Me. Rev. Stat. Ann. tit. 18-C § 5-910(6). Nor does a court’s appointment of a guardian terminate a POA; however, the agent must account to the guardian rather than the principal. Md. Code Ann., Est. & Trusts § 17-105(e).

How does one end it?
Maryland’s POA statute does not specify how a principal may revoke the POA.

What does an example look like?
Maryland provides a Personal Financial POA form at Md. Code Ann., Est. & Trusts § 17-202. This is also referred to as a General POA. There is also a Limited POA form at §17-203. Both forms are similar in scope, although the Limited POA form is easier to tailor to specific acts relating to decisions about the principal’s property.

What else should one know?
Maryland’s POA is based on the Uniform Power of Attorney Act.

What does an example look like?
Maryland provides a Personal Financial POA form at Md. Code Ann., Est. & Trusts § 17-202. This is also referred to as a General POA. There is also a Limited POA form at §17-203. Both forms are similar in scope, although the Limited POA form is easier to tailor to specific acts relating to decisions about the principal’s property.

What else should one know?
Maryland’s POA is based on the Uniform Power of Attorney Act.

Last updated April 2021

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