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New Law Updates Statutory Financial Power of Attorney Given To An Agent

Everyone should have a financial power of attorney because it allows you to appoint an agent who will carry on your financial matters if you are unable to act for yourself. This can be due to incapacity, disability, or illness. On October 1, 2023, a new Maryland law governing statutory powers of attorney (POA) went into effect. The updated version of the statutory power of attorney expands the powers that can be granted to an Agent.



What Is a Statutory POA?

A statutory POA can be used to grant your Agent a wide range of powers, including the power to:

  • Manage your bank accounts and investments;

  • Buy and sell your home and other real property;

  • File a lawsuit or other legal claim on your behalf; and

  • Apply for and obtain government benefits, like Social Security, Medicare, and Medicaid.

The new law expands the powers that can be granted to an Agent under a statutory POA. For example, Agents are now authorized to:

  • Buy and sell your motor vehicles, boats, planes, and other titled and untitled tangible personal property;

  • Act in all matters that affect a trust, probate estate, escrow, custodianship, or other fund to which the Principal is, claims to be, or later becomes entitled to as a beneficiary;

  • Create and transfer property to an intervivos revocable or irrevocable trust for the Principal’s sole benefit that on his/her death distributes the property in a manner consistent with the Principal’s existing estate plan, if any, and in accordance with Maryland law;

  • Make gifts of the Principal’s money and property to designated people in amounts greater than the annual gift tax exclusion amount (currently $17,000) (Note: the Principal must opt-in to this power);

  • Disclaim (i.e., refuse): 1) any interest in property the Principal might otherwise receive, either outright or in trust; 2) any powers that the Principal has over property or as a beneficiary of any trusts; and 3) any powers of appointment that the Principal has or may acquire, excluding any testamentary power of appointment that the Principal has already exercised in his/her Last Will and Testament; and

  • Seek damages against anyone who refuses to honor the statutory POA.


What Should You Do If You Have a POA?

If you have a POA, then it is important to review it to make sure that it complies with the new law. You may also want to consider updating your POA to take advantage of the new expanded powers for Agents.

If you do not have a POA, then we recommend that you create one. A POA is an essential estate planning tool that can give you peace of mind knowing that someone you trust will be able to make decisions on your behalf if you become unable to do so yourself.

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