Unpacking Maryland's New Statutory Form Power of Attorney

In a bid to adapt to the evolving needs and circumstances of individuals and families, the state of Maryland has enacted new legislation altering their statutory form for Power of Attorney (POA), effective October 1, 2023. This overhaul has introduced several changes aimed at providing more flexibility and clarity for both principals and agents. Here's a breakdown of the key amendments and what they entail for Maryland residents:

1. Enhanced Gifting Provisions:
• Finally, thirteen years after the state drafted their original power of attorney forms, the new legislation adds a gifting provision to the state’s general power of attorney form. In addition, the state added language augmenting the gifting powers of agents, especially concerning qualifying the principal for governmental programs or benefits. This is particularly crucial for Medicaid planning and eligibility, offering a pathway to expedite asset transfers for qualifying Marylanders for nursing facility entry​.
2. Self-Dealing Transactions:
• With the updated statute, agents can engage in self-dealing transactions specifically for Medicaid planning or qualifying for other public assistance, which was a limitation in the previous law​​.
3. Digital Signatures:
• In a nod to the digital age, the updated laws now accommodate digital signatures, making it easier for Maryland residents to put powers of attorney in place​​.
4. Expanded Default Powers:
• The expansion of default powers is another notable change, which provides more leeway for agents, making POAs a more potent tool for estate planning​​.
5. Appointment of Successor Agents:
• The law now allows the principal to opt-in for granting the last serving agent the authority to appoint successor agents, providing a continuity plan for managing the principal's affairs​​.
6. Compensation for Agents:
• The new form requires the principal to expressly state whether the agent is entitled to compensation, moving away from the earlier provision where compensation was only due if explicitly mentioned in the POA document​​.
7. Inclusion of Gifting in Statutory POA:
• The new statutory form now includes provisions for gifting, aiding in Medicaid eligibility and estate and gift tax reduction​​.
8. Creation of Joint Accounts:
• Principals can now opt to allow agents to create joint accounts with others or the agent, although this comes with an ownership interest with the other co-owner or the agent​​.

These changes echo the evolving dynamics of estate planning and asset management, providing a more flexible framework for principals and agents to navigate the complex landscape of financial and personal care decision-making.

However, it should be noted that the state’s forms still do not contain a revocation clause, meaning that unless you add appropriate language before you execute the document, any prior powers of attorney will continue to be in full force and effect, possibly creating a conflict between your financial agents and sowing confusion in the handling of your affairs during your disability.

The alterations to the Maryland POA laws are nuanced and may require thorough analysis to understand their impact fully. It's advisable to consult with legal professionals to explore how these changes may affect individual circumstances and to ensure that POA documents are updated accordingly to reflect the new laws.

The attorneys and professional staff at Stouffer Legal stand ready to help you make sure your documents are effective and comprehensive so that your family’s wealth benefits the persons you want. To learn how you can get started with your Estate Planning process visit https://www.stoufferlegal.com/