Maryland’s New Power of Attorney Act

On October 1, 2010, a new power of attorney act went into effect in the State of Maryland.  Efforts had been made for a number of years to get legislation passed that would govern the use of power of attorneys.  The new Act should assist the general public by making power of attorneys easier to create, interpret, and use.

Witness Requirement

Before October 1, 2010, only the principal had to execute (sign) a power of attorney and the signature had to be notarized.  The new law makes the formality required for a power of attorney even greater than that required for a Will.  Now two witnesses are required in addition to the principal’s signature being notarized.  (A Will requires two signatures but does not require notarization).

Effectiveness of Copies

The new law provides that copies of a power of attorney should be treated with the same legal significance as an original.  Thus, the days of banks and insurance companies requiring an original power of attorney are hopefully over.

Standardized Forms

For the first time ever, the Maryland statute provides two power of attorney forms in the statute itself.  The first is called a Personal Financial Power of Attorney, the other a Limited Power of Attorney.  These are provided as examples of valid power of attorneys – their specific use is not required.

Easier to Use

The new Act requires that persons (e.g. banks, insurance companies, brokerage houses) accept properly executed power of attorneys.  This is true for all power of attorneys – regardless of when they were executed.  The law also indicates that if a power of attorney is “substantially in the same form” as one of the statutory forms, any person that refuses to honor the power of attorney will be liable for the agent’s attorney fees in seeking court intervention.

Limitations

The new Act, by providing suggested forms and enforcement authority, should make the use of power of attorneys in Maryland easier.  Unfortunately, the “teeth” in the Act only apply to a power of attorney that is in “substantially the same form” as the statutory form.  We believe that the statutory forms accomplish about 90% of what a good power of attorney should.  There are notable absences from the statutory forms.  For example, the statutory forms to not provide for the power to engage in Medicaid planning or to take care of the principal’s pets.  As a result, we are providing our clients a power of attorney package that actually includes two different forms.  The first is a statutory form – to take advantage of the enhanced statutory enforcement language.  The second is a supplemental power of attorney that is a more exhaustive and thorough description of the powers being given to the agent.  This supplemental form includes language that gives the agent the power to act in areas that are not addressed in the statutory form.

Conclusion

If you already have a power of attorney, there is no need to get a new one.  So long as your power of attorney was executed properly under the then-existing law, it is still valid.  If you would like to take advantage of the new statute, our current power of attorney documents should be easier to use and enforce under the new law.

David Galinis
Managing Partner – Estates and Social Security Practice
Berman, Sobin, Gross, Feldman & Darby, LLP
481 N Frederick Avenue, Suite 300
Gaithersburg, MD 20877
301-670-7030
dgalinis@bsgfdlaw.com
www.BSGFDlaw.com
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