Also called a “financial power of attorney” or a “durable power of attorney,” a power of attorney lets one person (the principal) give legal authority to another (the agent) to act on the principal’s behalf. Despite being called a “power of attorney,” the agent doesn’t need to be a lawyer. A power of attorney is extremely important in case of a disability. A power of attorney lets the agent you chose manage all or part of your business or personal affairs. You can give your agent as many or as few powers as your wish, and you can chose when the power comes into effect. A power of attorney ceases upon death of the principal or when the principal cancels it.

Despite being called a “power of attorney,” the agent doesn’t need to be a lawyer.

In 2010, Maryland enacted the General and Limited Power of Attorney Act. The Act provides several important changes to the law in regards to powers of attorney in Maryland. A power of attorney signed after 2010 requires two witnesses and notarization. The Act also places stricter standards on an agent acting on behalf of a principal, including a duty of loyalty and requirement to keep records of all receipts and transactions made on behalf of the principal.

The Act also acted it response to situations where powers of attorney weren’t accepted . The Act provides statutory form powers of attorney. When these forms are used, a court may order a person (or bank or insurance company or institution) to accept them, and also be held liable for attorney’s fees and costs incurred in a court action seeking compliance. The result is that institutions have a financial incentive to accept these statutory forms, or face the possibility of paying attorney’s fees and court costs. The statutory form also provides a uniform document that institutions recognize and trust.

If you already have power of attorney before 2010 that was executed properly at the time, it remains valid. However, to take advantage of the added protections and utility provided in the 2010 law, talk to an attorney about executing a statutory form.

For more information on the 2010 law, check out this article from The Washington Post.

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