Law Offices of David C. Slade

A Power of Attorney (POA) is a document that allows you to appoint someone to take care of your financial and property affairs for you -- while you have the mental competence to do so.

It is important to prepare a Power of Attorney while the principal is still mentally competent to do so.  Once a person loses mental ability, either through disease (such as Alzheimers) or injury or accident, they no longer are able to do so.  In such an event, the family must go to court for a court-appointed guardian-of-property, sometimes referred to as a "conservator."  The beauty of a POA is that a person can appoint whom he or she wants as the attorney-in-fact, and retains control over the appointment.  Guardianship actions in Court are often stressful, emotional, slow and time consuming, and expensive.

A POA is a private appointment, without the need for any intervention or supervision by any court.   The POA can also be revoked by you at any time (assuming mental competency); revocation likewise does not require intervention or supervision by a court.

A "Power of Attorney" is a powerful document.    You must be cautious about giving another person broad power over your financial and property affairs.   Appoint someone you know and trust.  Be sure your attorney-in-fact is aware that he or she is required by law to act solely for your benefit, and not for the benefit of the attorney-in-fact.

There are several types of "Power of Attorneys" or as they are commonly called, POAs.  There are General or Limited POAs, temporary or permanent (durable) POAs,  and immediate or "springing" POAs.

General and Limited POAs.   A "general" POA authorizes your attorney-in-fact to handle all of your financial and property affairs.  It is a full grant of power (and responsibility) to your attorney-in-fact to handle all of your finances property and manage all of your property, whether personal property (eg. cars, furniture, etc) or your real estate.

A "limited" POA is an expressly limited grant of authority to your attorney-in-fact to manage only those aspects of your finances or property that are described in the POA.  For example, you can still handle all of your property and investments, but want someone to be responsible for paying your monthly bills.   You could execute a "limited" POA authorizing your attorney-in-fact to pay your monthly household bills from your checking account.  Your attorney-in-fact then could write and sign checks on your account, but only for paying your monthly household bills -- not for any other expenditure.

Temporary and Permanent (Durable) POAs.  A temporary POA covers a certain period of time.  For example, suppose you want to go on vacation for three months, but want your household bills to be paid while you're gone.  You could execute a temporary POA authorizing your attorney-in-fact to pay your household bills during the time you are gone on vacation.

A permanent POA, commonly known as "durable" is a POA that has no time limitation, and remains in force and effect even though you lose your mental abilities.  In years past, courts held that once a person lost his mental capacity, any POA that they had executed also lapsed.   By statute the Maryland legislature has provided that a POA can be "durable" such that it remains effective even though the principal loses their mental capabilities, either through disease such as Alzheimers, or injury, and thus lose their power to revoke the POA.  If the POA is clear that the principal's intent is for the POA to continue even after the principal is mentally incapacitated, then the POA is "durable."

Immediate and "Springing" POAs.   A POA can take effect immediately upon the signature of the principal.  This is common practice, although not the better practice.  It is better to have a POA executed well before you will need it, so that in the event you are incapacitated either physically or mentally it can "spring" into effect.  A common provision is that the POA will take effect upon the certification of two medical doctors that the principal is not mentally capable of managing his or her financial and property affairs.  With such a provision, your POA can "sit on the shelf" for years, but come the day you are incapacitated, your loved ones can "spring" it in to effect.