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Introduction: Basics of POAs & Previously Covered Requirements
As we briefly discussed in the earlier piece on technical requirements, a power of attorney (“POA”) is a legal arrangement in which one person (“principal”) gives another person (“attorney in fact” or “agent”) the authority to carry out certain decisions on his or her behalf. Powers of attorney can be customized to fulfill whatever the principal wishes to fulfill – the attorney in fact can be entrusted to make certain financial decisions, medical or health related decisions, investment decisions, and so forth. Ordinarily, POAs are created with the intention of providing for the principal’s health, but again the specific purposes can be wide ranging.
In the earlier piece, we also discussed some of the core technical requirements to create a valid and enforceable POA. For example, we referenced the witness requirements, notary requirements, capacity requirements, and so forth. All these technical requirements must be satisfied to produce a fully valid and enforceable POA in the State of Maryland. POAs are similar to contractual agreements in the sense that there generally isn’t “wiggle room” with respect to these requirements; these requirements are firm, and so Marylanders who want to create a POA need to understand how they work.
Let’s go over some of the additional requirements which we didn’t cover in the earlier piece.
Additional Requirements: Best Interests of the Principal / Recordkeeping
When someone is appointed as an attorney in fact, that person must act within certain bounds: as a general rule, the attorney in fact always must act in the best interests of the principal. In other words, although the principal might give broad decision making powers to the attorney in fact, the attorney in fact cannot simply make decisions without considering the impact on the principal. In other words, there is a fiduciary obligation assumed by the attorney in fact. Furthermore, another requirement is that the attorney in fact or agent must maintain records of all transactions engaged in which affect the principal.
Additional Requirements: Details on Remotely Witnessed / Electronic POAs
In addition to these other requirements, there are more requirements which apply specifically to those POAs which are “remotely witnessed” or signed electronically by the parties involved. Maryland has had new rules which apply to remotely witnessed POAs since October 1, 2010. We referenced some of these requirements in the previous piece, but there are others. When the principal signs this type of POA, the principal must be a resident of Maryland and physically present within the state borders of Maryland. Each witness who signs the POA must be a resident of the US and must be physically located within the borders of the US. The supervising attorney (who can also be one of the two official witnesses) must create a “certified power of attorney,” something which also must follow strict requirements. All the parties involved must be in the physical or electronic presence of each other at the time of the signing.
Amendments to POAs
If the principal wishes to make amendments to a fully executed POA, formal amendments are possible. However, to make a valid amendment, the principal and attorney in fact must check off the same requirements which apply to an initial POA. In other words, the parties must fulfill the same exact requirements with respect to capacity, age, witnesses, notary, and so forth.
Contact the Murphy Law Firm for More Information
If readers want more information on the complex technical requirements to create a valid and enforceable POA in Maryland, or another related topic, contact one of the attorneys at the Murphy Law Firm today by calling 240-219-5243.
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