Durable Financial Power of Attorney
A durable financial power of attorney is a legal document in which you name a financial agent, who is somebody to make decisions about your financial affairs if you are incapacitated.
“Durable” means that the power of attorney remains in effect notwithstanding your incapacity.
Who Should You Name as Your Agent in a Financial Power of Attorney?
Your financial agent should be someone whom you fully trust to act in your best interests.
Appointing co-agents generally is not advised, because, in the event of conflict, the agents may end up in court in a guardianship proceeding. Generally, a preferred approach is to appoint one person to be your agent. And then perhaps appoint a successor in the event that your agent is unable to serve or continue serving.
The durable financial power of attorney should include a clause that says when it becomes effective. It can become effective immediately, upon signing. Alternatively it can become effective only in the event of your subsequent incapacity, a “springing” power of attorney. A springing power of attorney should say how your incapacity is to be determined. Typically the document directs that your incapacity is conclusively established by a certificate from your treating physician.
Maryland courts recognize and enforce all properly executed powers of attorney.
Maryland Statutory Power of Attorney Form
But Maryland has a statutory financial power of attorney. And if you use that statutory form, and have to go to court to get a bank or other third party to accept it, then Maryland law entitles you to reasonable attorney’s fees and court costs — an important advantage.
What’s more, Maryland’s statutory financial power of attorney is easy to read, there’s not a lot of legalese to it. And it’s flexible, it includes a blank “special instructions” section. And what you can do is use the statutory form as a starting point, and, then, in the special instructions section add additional helpful wording.
For example, you might want to add language regarding Medical Assistance (“Medicaid”). Medicaid is the government health insurance program that helps pay for long-term nursing home care. You definitely want to consider including language in your durable financial power of attorney that authorizes your agent to:
- retitle assets
- make gifts
- purchase annuities
- establish trusts, including supplemental needs trusts (sometimes termed special needs trusts)
- and generally do all the things necessary to work with a lawyer on qualifying for Medicaid long-term nursing home care insurance coverage while holding onto more of your funds.
A lawyer definitely should draft your financial power of attorney to make sure that it is worded in a way that most appropriately addresses your needs and goals.
For More Information or Help with a Maryland Durable Financial Power of Attorney
The Law Office of Henry Nash is knowledgeable about powers of attorney. If you have any questions or concerns about durable financial powers of attorney and want to discuss with an experienced elder law, disability law, and estates & trusts lawyer, please feel free to contact us.