A power of attorney authorizes one person to act for another person regarding specific legal matters. The person giving the authority for someone else to act on their behalf is called the principal, while the person now authorized to act for the principal is called the agent. For example, if Bob wants to Sally to have access to Bob’s checking account, Bob drafts a power of attorney, authorizing her to do so. Bob is called the principal, and Sally is the agent.
There are two primary areas that powers of attorney are drafted for: (1) financial matters, and (2) medical matters.
Financial Power of Attorney:
In Maryland, the personal financial power of attorney is a statutory specific form and has been since the 2010 Maryland Power of Attorney Act. The Maryland Power of Attorney Act requires that financial institutions accept properly executed powers of attorney forms. Significantly, the law provides that the power of attorney must be “substantially in the same form” as the state statutory forms. Therefore, it’s not a good idea to change anything on the form, lest a bank, for example, decide not to honor it. Furthermore, it’s prudent to send the power of attorney to the financial institution before you need it just in case their compliance department raises any issues with it.
The typical financial power of attorney form used is a general power of attorney. These grant broad, sweeping financial powers to the agent. However, if the principal only wants the agent to be able to transact on behalf of the principal for one specific matter, it may be a good idea to draft a limited power of attorney, which only authorizes the agent to transact on behalf of the principal in that one, specific area.
Healthcare Power of Attorney (Advance Directive):
An advance health directive accomplishes a few things: first, it appoints one or more agents who are authorized to access your health records and be involved with your health decisions. Second, it contains your own instruction for end-of-life scenarios in case you become incapacitated to the point where you cannot make your own decisions. It also includes a document called “post death instructions,” in which the principal sets out her preferences for dispositions of their body, anatomic donations, and funeral arrangements.
Although it may seem morbid to fill this document out, it is of the utmost importance, not only in order to have seamless procedures, but to spare your family the need to make these decisions without your input.