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When someone comes to us for a will, we usually explain why they also need a durable power of attorney.

A durable power of attorney gives someone the legal authority to handle your financial affairs even if you are disabled.

If you become disabled without a power of attorney in place, your loved ones will have to bring an action in court to have a guardianship established.

This type of court proceeding can cost several thousand dollars and can get ugly. Court battles can start over who should be your agent, what should be done with your money, and a judge ultimately makes the decision – not you.

Look at a durable power of attorney as an insurance policy. You hope you never need it. But if you do, things are much more simple and less expensive for your loved ones. With advances in medicine, it is becoming more likely that at some point in your life you will at least temporarily find yourself unable to handle your financial affairs.

The Agent – Who to Pick

When you sign a power of attorney you need to pick someone to act on your behalf. That person is your agent. Pick someone you trust and someone who has some business sense. Since they will be stepping into your shoes, you want someone who will follow your wishes and approach things the same way you do.

Just in case they do not want to serve, or are unable to do so, you want to name at least one alternate. So think now about who your “backup” agent should be.

General v. Specific

A specific power of attorney provides for a limited set of things the agent is allowed to do on your behalf. A general power of attorney lets someone step in your shoes and do anything that you can do.

When it comes to a durable power of attorney designed to take effect after your disability, it is best to make it as general as possible. You never can tell what the future will bring.

If you put limits on the power of your agent you may prevent them from doing something that you would want done.  If you have an agent who you trust to step into your shoes, it probably makes sense to give them as much discretion as possible.

When Should It Go Into Effect?

You have the choice of having your durable power of attorney becoming effective immediately upon signing, or upon your disability.

When you have a power of attorney that “springs” into effect upon your disability, your agent will need to prove this has occurred. This may not be easy. If you pick an agent who you really trust, you may want to think about it going into effect immediately. This will save your agent a lot of legwork getting certifications from doctors.

If you are worried that the person will take your durable power of attorney and clean out your bank account, then maybe they aren’t the right person to pick as your agent!

Senior couple meeting an estate planning attorney.

A document that is effective immediately may also come in handy if something comes up where you want your agent to do something for you even though you are not disabled.

Keep in mind that a power of attorney does not limit your power to act on your own behalf. If your agent starts doing something wrong before you are disabled you can revoke their power to act on your behalf.

The Maryland Statutory Form

Originally there was no legal requirement that a bank or other institution accept your power of attorney. The bank could just look at your form and say “no.” This lead to problems for some people who had to get court orders to enforce the power of attorney they thought had them covered.

In 2010 a new Maryland law went into effect that solved the problem of financial institutions refusing to accept someone’s durable power of attorney. Like most new laws, it is somewhat of a double edged sword.

The Good

If you use the Maryland form power attorney, or one substantially similar to the Maryland form, a financial institution cannot refuse it. If they do, they could be held liable for the attorney’s fees incurred in forcing them to accept it.

The Bad

If you have an old power of attorney, or one that is not like the Maryland form, there is a good chance a bank will now refuse to accept it. They don’t have to do this, but it is now safer for them to take the position that every power of attorney must now conform to the new Maryland law.

This may mean your old power of attorney needs to be redone according to the 2010 Maryland law for the purely practical reason of making sure the bank takes it!

The Ugly

The Maryland form was drafted by the legislature, and you know that old saying about how making laws is like making sausage.

Lots of people had a say as to what went into the new law. So guess what? The Maryland form is ugly. You have to be a lawyer to make sense of it. This is not what anyone would draft up on their own.

But if you start making changes, you have to make sure what you end up with is still “substantially similar” to the Maryland form. How can you tell what some future bank executive is going to think when he sees your allegedly “substantially similar” form?

We believe it is best to leave the form ugly – just like the politicians created it.

Conclusion & Next Steps

It is smart to make sure your financial affairs are handled even if you are not able to handle them yourself. Get your durable power of attorney done now.

We make this process as simple as possible. Just give our office a call and schedule a consultation.

We will email you a questionnaire that will help start the make the decisions you need to make to get this important document drafted and executed.

Once you meet with one of our lawyers, we finalize those decisions and get a draft done for your review. We then have you come back to our office so we can witness you sign your Durable Power of Attorney.

During the consult we will also ask if you have a Will and an Advance Medical Directive. For more on what these documents are, and why you should get them see our post  Getting Your Will Done and The Advance Medical Directive.  

Once you have your Durable Power of Attorney and other documents done make sure you pull them out every year and review them as part of your annual legal review to make sure everything is still relevant.

Want to know more? Discover what you need to know about Wills in Maryland. Click here to see our Free Legal Consumer Guide to Wills and get answers to your questions today. Know your options. Be informed. Protect yourself.

Need an attorney for your will? Please contact us for a consultation today if you need an experienced estate planning lawyer for your will.

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