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Ensuring that your assets are properly managed and preserved in the event that you are no longer able to do so yourself can be a major concern. A power of attorney is a legal instrument that delegates an individual’s legal authority to a trusted person to make decisions on his or her behalf. Whether it be in the short term while an individual is out of the country or for an extended period due to physical or mental incapacity, powers of attorney can be an incredible tool to help individuals manage their property and ensure their well-being.


General v. Specific

The utility of a power of attorney often depends on the powers granted to the agent under the terms of the document. There are two basic types of powers of attorney: general and specific. A general power of attorney gives broad authorizations to the agent to deal with a variety of financial matters ranging from access to bank accounts to the transfer of assets into a trust. General powers of attorney are most commonly used as part of an estate plan in order to account for the management of financial matters in the event of incapacity. On the other hand, a specific power of attorney places particular limits on what the agent can do on behalf of the principal. A great example would be the use of a specific power of attorney in a real estate transaction. Often times a party to the transaction may be unable to attend settlement and, alternatively, will appoint an agent to execute the closing documents on his or her behalf through the use of a specific power of attorney that is limited to actions with respect to that particular transaction.


Maryland Power of Attorney Act

For many years, the laws governing powers of attorney were vague causing individuals to face a number of challenges when trying to use a valid power of attorney. Due to a concern over misconduct and forgery, many banks and financial institutions maintained their own requirements and procedures for utilizing a power of attorney, which often led to significant delay in their review or even outright refusal to honor the document. Efforts were made for a number of years to get legislation passed to govern these documents and, finally, in 2010, Maryland established the Maryland Power of Attorney Act. Among other things, this Act established a Form Maryland Power of Attorney that financial institutions were required to acknowledge or would otherwise be liable for the damages and costs resulting any delay or refusal. Additionally, the new law ensured that copies of a power of attorney would be treated with the same legal significance as an original. With this new legislation in place, residents of Maryland were armed with a powerful document that could be easily used in a variety of situations with very little resistance.


Requirements for a Valid Power of Attorney

Maryland law sets forth four specific requirements for an effective Maryland power of attorney; (i) the power of attorney must be in writing, (ii) it must be signed by the person establishing the power of attorney, (iii) it must be acknowledged in the presence of a notary public, and (ii) it must be witnessed by at least two adult witnesses. Although it seems as though this document will need to be executed in the presence of three individuals total, the law also provides that the individual serving as the notary public may also act as one of the witnesses. In order to create a valid power of attorney, an individual must be at least 18 years old and mentally competent, meaning that he or she understands the document and the powers that it passes to the agent. Additionally, any power of attorney that authorized the agent to sell or transfer property must be recorded in the Land Records for the County in which the subject property is located.


Other Jurisdictions

Although the Maryland Power of Attorney Act established the rules for an effective power of attorney, as well as a form that will be recognized throughout the State, many individuals may have powers of attorney that were established while he or she was living in another state. Fortunately, Maryland law provides that a power of attorney executed somewhere other than in the Maryland is valid and enforceable in this state provided that, when executed, it complied with the laws of the state in which it was established. Additionally, for those serving in the armed forces, the law also provides that any power of attorney executed in accordance with federal law requirements for a military power of attorney shall be recognized as valid in the State of Maryland.


Challenges Faced in the COVID-19 Crisis

The level of uncertainty about the future continues to rise amid the crisis resulting from the historic spread of COVID-19 throughout the world, and the social and economic impact that it is having in America. As a result, many Americans are rushing to ensure that their estate planning documents, including powers of attorney, are in place and up to date. However, the various government mandates and social distancing recommendations have made it incredibly challenging to execute a new power of attorney or update an existing document. As mentioned above, a valid power of attorney must be executed in the presence of two witnesses and a notary public. Fortunately, the Office of Governor Larry Hogan recently announced an executive order allowing remote notarization during the COVID-19 emergency. However, a similar ruling or order has not been made with respect to remote witnessing, which leaves individuals at risk to exposure in order to obtain the necessary witnesses for their powers of attorney and other estate planning documents. As a result, individuals should discuss the various options for execution with an attorney that is prepared to offer several alternatives to the traditional signing process.

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Jonathan McGowan

Jon is a partner of the firm and a member of the Business Law, Estates & Trusts, Real Estate, and Commercial Finance practice groups. His business practice focuses on assisting clients in the areas of mergers and acquisitions, corporate finance and securities, and general corporate matters. In addition, he counsels individuals and families to help develop custom estate plans and business succession plans that address the client’s specific needs to help protect and impart their legacy. His real estate and finance practice touch areas of acquisition, development, leasing, and lending in the representation of buyers, sellers, and private and commercial lenders. Jon also serves as Counsel to the firm’s affiliated title company, Eagle Title. Contact Jon at or (443) 569-7389

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