Planning ahead can bring confidence, especially when preparing for unexpected circumstances. One essential document in an estate plan is a power of attorney. For many Maryland residents, the term may be unfamiliar or unclear, but understanding this tool can ensure that medical or financial decisions are handled responsibly if a person cannot act for themselves. This guide explains what powers of attorney do, why they matter, and how Maryland law treats them.
Do not wait to ask important questions about a power of attorney—contact Ward & Co Law through the online contact form or call (410) 775-5955.
What Is A Power Of Attorney?
A power of attorney is a legal document that allows one person, called an agent, to act on behalf of another person, known as the principal. This authority can cover financial matters, legal documents, health decisions, or other responsibilities, depending on how the document is written.
Maryland law requires that a power of attorney be signed, witnessed, and notarized to be enforceable. Because it grants authority to another adult, the principal must be capable of understanding what the document means at the time of signing.
Why A Power Of Attorney Matters In Maryland
A power of attorney becomes especially important if a person becomes incapacitated. Incapacity means a person is unable to manage their property, finances, or personal decisions due to illness, injury, or cognitive decline. Without a valid power of attorney, families may have to request guardianship through the court system, which can take time and may involve fees.
Establishing a power of attorney in advance can streamline decision-making and maintain continuity in managing financial or medical needs.
Types Of Powers Of Attorney You May Encounter
Maryland recognizes several categories of powers of attorney. Each serves a different purpose, and choosing one depends on the principal’s goals.
General Power Of Attorney
A general power of attorney grants broad financial authority to an agent. This may include managing bank accounts, paying bills, overseeing investments, or handling property.
Limited Power Of Attorney
A limited power of attorney grants authority for a specific task or timeframe. For example, a person who is traveling abroad may allow an agent to sign closing documents for a home purchase.
Medical Or Health Care Power Of Attorney
A health care power of attorney grants authority to make medical decisions if the principal is unable to communicate. This is often paired with an advance directive that outlines preferences for medical treatment.
Durable Power Of Attorney
A durable power of attorney remains valid even if the principal becomes incapacitated. In Maryland, financial and health powers of attorney typically need specific durability language so they remain effective.
Springing Power Of Attorney
A springing power of attorney takes effect only after a defined event, often a declaration of incapacity from a physician. These can involve additional procedural steps, so individuals should discuss how activation triggers work.
What A Power of Attorney Can and Cannot Do
Before choosing an agent, it helps to understand what authority the document grants. Many Maryland residents want peace of mind without turning over excessive control.
Here is a brief overview of common permissions a power of attorney may include:
- Managing bank or investment accounts
- Paying financial obligations
- Filing tax returns or completing legal documents
- Managing real estate transactions
- Overseeing insurance and government benefit claims
After reviewing these responsibilities, the principal can limit or expand authority in writing. A power of attorney cannot override a will, change beneficiary designations without permission, or authorize actions restricted by statute.
Choosing The Right Agent
Selecting an agent requires careful consideration. This person should be reliable, organized, and able to communicate honestly. Some individuals choose a spouse, adult child, or close friend. Others prefer a professional representative.
Regardless of the choice, an agent has a legal duty to act in the principal’s interest and maintain accurate records of financial activity.
How A Power Of Attorney Fits Into An Estate Plan
A power of attorney is only one component of an effective estate plan. Many people also consider wills, trusts, and medical instructions.
Creating a power of attorney early can support:
- Smooth handling of financial obligations
- Reduced risk of court intervention
- Clear communication among family members
- Better coordination with wills or trust planning
When coordinated with other documents, the power of attorney can create stability during emergencies.
Using A Maryland Statutory Power Of Attorney Form
Maryland provides statutory forms that meet legal requirements when completed properly. These forms are designed to standardize language and reduce disputes about validity. Even though the forms exist, many residents prefer guidance from a Glen Burnie estate planning attorney to ensure accuracy, understand limitations, and adjust language to unique needs.
Legal advice may help prevent unintended consequences and reduce confusion among family members.
Common Misunderstandings About Powers Of Attorney
Several myths frequently appear during estate planning conversations. A few examples include:
- A person’s spouse automatically gains authority over finances without documentation
- A power of attorney continues after death
- A handwritten note carries the same weight as a notarized form
- Young adults do not need any financial planning documents
A power of attorney does not continue after death, and at that point, a will controls asset distribution. Young adults, especially those who manage their own finances, may still benefit from naming a trusted decision maker in certain circumstances.
What Happens Without A Power Of Attorney?
When a person loses capacity without executing a power of attorney, the court may appoint a guardian. Guardianship is a legal process that authorizes someone to make decisions on behalf of the incapacitated person.
Guardianship can require hearings, evidence, and legal oversight. Families often view this route as more time-consuming than executing an estate plan in advance.
When To Consider Assistance From A Glen Burnie Estate Planning Attorney
Drafting a power of attorney involves legal formalities—accurate signatures, witnessing, and notarization. Maryland requires that witnesses be physically present and meet criteria under state law. An attorney familiar with Maryland procedures can help ensure validity and discuss how financial or medical preferences should be documented.
For individuals with business interests, blended families, or complex financial accounts, a Glen Burnie estate planning attorney can explain options that prevent confusion or disagreement later.
Understanding Tax And Financial Implications
An agent acting under a financial power of attorney may need to review account balances, tax filings, or investment accounts. The principal should communicate expectations clearly. Maryland residents sometimes choose co-agents, though this may require seamless cooperation.
Adding Powers Of Attorney To Existing Documents
Anyone who already has a will or trust can still execute a power of attorney. Some people review their estate plan every few years or after major life events. Marriage, divorce, relocation, or major purchases may trigger a review. Updating a power of attorney can ensure that it reflects current relationships and priorities.
Power Of Attorney And Confidentiality
An agent must handle personal information responsibly. Bank records, passwords, and identification numbers should be safeguarded. Transparency helps prevent financial misuse and encourages proper oversight.
Maintaining Flexibility While Planning Ahead
A power of attorney does not limit independence. As long as the principal remains capable, they maintain full control and can revoke the authority at any time. Maryland law allows revocation if the principal signs a document stating that the previous power is withdrawn.
Speak With A Glen Burnie Estate Planning Attorney About A Power Of Attorney
A power of attorney is an effective tool for building a secure estate plan. For Maryland residents, understanding how authority transfers, how incapacity works, and how documents must be executed can simplify future decisions. Consultation with a Glen Burnie estate planning attorney may support clarity when organizing finances, medical instructions, and legal authority. To begin, contact Ward & Co Law through the online contact form or call (410) 775-5955 for more information.