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Introduction: Basics of POAs
In the past, we’ve devoted a few pages to “power of attorney” (POA) arrangements. POAs are worth mentioning because these arrangements can confer substantial benefits upon those who create them. And, in some cases, they may simply be necessary in order to ensure that a given person receives adequate care.
Essentially, a POA is an arrangement whereby one person – referred to as the “principal” -- gives decision making authority to another person – referred to as the “agent” or “attorney-in-fact.” POAs can came in multiple variations – there are general POAs, limited POAs, durable POAs, medical POAs (or “advance directives”), and so forth. These variations contain important distinctions, and so those looking to create a POA need to know the relevant details; for example, a limited POA refers to an arrangement in which the agent only has decision making power over the items specifically referenced in the POA form. By contrast, with a general POA, the agent is assumed to have broad decision making powers which cover all business and personal areas.
Maryland Act vs. the UPOAA
The State of Maryland currently has something called the Maryland General and Limited POA Act. This act was first developed in 2015, but has been modified since that time in various ways. This act is modeled heavily on the Uniform Power of Attorney Act (“UPOAA”), but differs in certain respects. This is similar to how many states have adopted the essential provisions of the “restatement” on contracts but have their own particular variation of contract law.
Essentials of the Maryland Act: Section 17-101 through 17-116
The Maryland act begins with definitions which are necessary to navigate the rest of the law: terms such as “agent,” “property,” “statutory form power of attorney,” “incapacity,” and other critical terms are precisely defined. In Maryland, as in other jurisdictions, the terms “agent” and attorney-in-fact are used interchangeably.
The act then goes on to discuss the provisions pertaining to disbursements, and the disclosure requirements which govern disbursements. Next, the act discusses who has standing to file a petition to review the agent's conduct. Even though agents are granted certain powers, this power does need to be reviewable, otherwise there is always the possibility of abuse. The act then discusses “statutory form power of attorney,” and references the fact that someone who refuses this arrangement may be compelled to accept the arrangement or face court penalties.
The act the discusses the concept of “durable POA,” which essentially means a POA arrangement which carries on even after the principal becomes disabled or incapacitated. The act then discusses additional critical concepts, including how valid POAs may be created, how they may be terminated, the concept of “good faith” in the context of agent conduct, reimbursement of expenses incurred by agents when carrying out duties, and others.
In total, this act includes 16 sections, with the last section titled “short title,” which simply provides that the act itself may be referred to as the Maryland General and Limited Power of Attorney Act.
Contact the Murphy Law Firm for Additional Resources
To learn more about the power of attorney act in Maryland, power of attorney arrangements, fiduciary obligations of trustees, or any other estate planning topic, contact one of the estate planning attorneys at the Murphy Law Firm today 240-219-5243.
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