End-of-life planning involves some difficult choices. Sometimes, we can’t make those decisions for ourselves or we are unable to tell others our wishes because for medical reasons we are unable to.
In these situations, we may need to give over decision-making power to a trusted family member or loved one. This article explains the ins and outs of a power of attorney.
What Is Power of Attorney?
In the term power of attorney, attorney means a person who is chosen to act for another person in their business or legal issues. So, each person is their only power of attorney unless they fill out papers to have another person act as their power of attorney, too.
If you are giving power of attorney to another person, in legal terms you are the principal. The person who will receive the power is called the agent. If you give power of attorney to another person, you do not give up your decision-making power. It only means that you and your agent both have the power to act on your behalf.
You can also just give power of attorney to another person for specific issues. And Maryland updated its power of attorney laws in 2010 (the Power of Attorney Act) to remove some of the limits on choosing agents.
You can look at and print a copy of the power of attorney form here.
How Do You Give Power of attorney?
For you to give power of attorney, you must be:
- at least 18 years old;
- intend to give the power to the person designated in the document; and
- mentally competent, which means able to understand
- the document;
- which powers are being granted; and
- which property is affected by the power granted.
If you qualify, you must then complete these steps:
- complete the written power of attorney form (§ 17-202. Personal financial power of attorney);
- sign the form as the principal, or another person in the physical presence of the principal and at the principal’s direction;
- acknowledge the signed and completed form must be acknowledged by the principal in the physical or digital presence of a notary public;
- have two or more adult witnesses sign the power of attorney form
- in person, with the principal and each other or
- in the electronic presence of the principal and each other or
- any combination of physical or electronic presence.
When a power of attorney is electronic or you are using a remote witness, you must also:
- when the principal and witnesses sign the power of attorney, the principal and all witnesses must be in the physical presence or electronic presence of one another and a supervising attorney (the supervising attorney may be one of the witnesses);
- when the principal signs the power of attorney, the principal must be a resident of Maryland or physically located in Maryland;
- each witness who is in the electronic presence of the principal when the witness attests and signs the power of attorney or provides an electronic signature on the power of attorney must be a resident of the United States and physically located in the United States at the time the witness attests and signs the power of attorney;
- the principal and witnesses must sign the same power of attorney document (or counterpart);
- the supervising attorney must create a certified power of attorney.
When you need to certify your power of attorney, it must be:
- A true, complete, and accurate paper version of all pages of the power of attorney, including the original signatures and electronic signatures of the principal and all witnesses.
- A signed, original paper certification by the supervising attorney stating the date that the supervising attorney watched the principal and witnesses sign the power of attorney. The supervising attorney will also state that they took reasonable steps to verify the participants’ identity, the signatures were real, and that they met all the requirements to make those signatures legal.
Current Maryland law allows for your notary public to serve as one of your two witnesses in person or remotely.
What Are the Types of Power of Attorney?
A general power of attorney gives the agent the power to act for the principal in all business and personal matters such as managing bank accounts.
A statutory power of attorney is when a written document for the power of attorney is not form § 17-202. Personal financial power of attorney. In Maryland, any written document or other record that gives someone the power to act for another person will be considered a power of attorney.
The document or record does not have to say power of attorney because when completed, it is a statutory form power of attorney.
A limited power of attorney only gives the agent the legal decision-making powers defined in the document. This type of power of attorney is often used to give the agent the right to make financial decisions, manage real estate, or make health care decisions when the principal is no longer capable of doing so for themselves.
The durable power of attorney does not end when the principal becomes too disabled or incapacitated to make decisions for themselves. In Maryland, a written power of attorney is considered to be durable unless the principal dies or the written document states the conditions to end it.
A general power of attorney gives the agent the power to manage business and personal matters, and advanced directives do the same for health care decisions. Under advanced directives, the agent is known as a health care agent.
The principal has to inform their doctor about an advanced directive that they want to be honored. For a health care provider to act as the agent, they can only do so if they were granted that power before they began providing care for the principal.
Unless otherwise stated, advance directives go into effect as soon as the principal is unable to make their own decisions.
What Can a Person Do With Power of Attorney?
A power of attorney document should describe what powers the agent has. Generally, an agent must:
- act in the best interest of the principal and make decisions based on what they think the principal would want them to do to the best of their ability;
- keep records of all receipts and transactions made on the behalf of the principal and act in their best interest; and
- be paid for reasonable expenses made while acting on the behalf of the principal.
The agent has no right to other monetary compensation unless it is set out in the power of attorney document.
When Does Power of Attorney Take Effect?
A power of attorney usually takes effect as soon as the principal signs the document. But you can have a power of attorney that only goes into effect when a certain event happens, such as when the principal becomes ill. This is called a springing event.
The principal can delegate a specific person to decide when a springing event has occurred. If a springing event happens and no one has been authorized to make that decision, then a doctor or judge can.
How Do I End Power of Attorney?
A principal can end the power of attorney at any time. Otherwise, a number of events can end a power of attorney:
- the principal dies (ends when the agent learns of the principal’s death);
- the principal becomes incapacitated (unless the power of attorney is durable);
- the power of attorney gave an end date;
- the purpose of the power of attorney is accomplished; or
- the agent dies, resigns, or cannot fulfil their duties, and the power of attorney does not provide for another agent to take over.
If you’re in a position that requires a discussion about power of attorney, it’s probably a difficult time. At Albers & Associates, we can provide competent and compassionate professional legal advice for you and your loved ones to help you navigate this issue. Please call us for a consultation today.