A Power of Attorney (POA) is an essential legal document that allows a person (known as the principal) to grant another individual or entity (the agent) the authority to make decisions on their behalf. Understanding the duration and termination of a POA is a fundamental aspect of estate planning in Maryland. The duration of a POA largely depends on its type - whether it's a durable, springing, limited, or medical POA - and the specific conditions set forth within the document.
The lifespan of a Power of Attorney is typically defined within the POA document:
In the state of Maryland, the duration of a POA is generally determined by the stipulations outlined in the POA document itself. This means that the POA can be set to expire on a specific date, upon the occurrence of a particular event, or upon the incapacitation or death of the principal. These conditions can be defined by the principal when creating the POA to accommodate their specific needs.
The duration of a Power of Attorney also depends on its type:
Different types of POAs have unique characteristics and expiration rules. Understanding these differences is crucial for effective estate planning.
- Durable Power of Attorney: This type of POA remains effective even if the principal becomes mentally incapacitated. For example, if a principal is diagnosed with dementia, the durable POA will continue to be effective, allowing the agent to make decisions on their behalf. However, like all POAs, it ceases to be effective upon the principal's death.
- Springing Power of Attorney: A springing POA only comes into effect under specific circumstances, such as the principal's incapacitation. For instance, if a principal is involved in an accident and becomes unconscious, a springing POA would spring into action, allowing the agent to make decisions. Once the principal regains capacity, the POA loses its validity unless otherwise specified in the agreement.
- Limited Power of Attorney: Also known as a special POA, it is used for a specific purpose or for a limited period. For instance, if a principal needs someone to handle a property transaction while they are out of the country, a limited POA could be used. Once the transaction is completed, the POA automatically expires.
- Medical Power of Attorney: This type of POA gives the agent the authority to make medical decisions for the principal if they become unable to do so. For instance, if a principal is undergoing major surgery and complications arise that require further medical decisions, the agent can step in. This type of POA expires when the principal dies or revokes the POA, or when the principal regains the ability to make their own decisions.
Understanding these different types of POAs and their respective expiration rules can help both individuals and their appointed agents to navigate the legal landscape of power of attorney in Maryland more effectively.
Revoking a Power of Attorney:
If a principal decides to revoke a POA before its stated expiration date, they must follow certain legal procedures prescribed by Maryland law. Revoking a POA isn't as simple as deciding one day that the agreement is over. This process requires a thorough understanding of legal procedures to ensure all responsibilities are properly terminated.
- The principal must prepare a written notice of their intention to revoke the POA. This document is known as a "Revocation of Power of Attorney." This revocation notice should include the principal's name, the agent's name, and the date the original POA was executed. It's very important that this document is signed and dated by the principal.
- The principal should deliver this revocation notice to the agent. This can be done in person or through certified mail with return receipt requested, to ensure proof of delivery. It is also recommended to notify any third parties (like banks or other financial institutions) that may have been dealing with the agent under the authority of the POA.
Once these steps are completed, the revocation is generally effective immediately, and the agent no longer has the authority to act on behalf of the principal. However, in some cases, such as with a durable POA, the principal may need to record the revocation at the local county recorder's office where the original POA was filed.
It's important to note that if the principal is mentally incapacitated, they cannot legally revoke a POA. In such a case, a court may need to intervene to determine the validity of the revocation. If you are considering revoking a POA, it's always advisable to consult with an experienced attorney to guide you through the process in accordance with Maryland law.
Power of Attorney after the principal's death:
Once the principal passes away, the role of the agent generally ends. The POA does not grant the agent the authority to manage or distribute the deceased's estate. This responsibility falls to the executor named in the deceased's will or to the administrator appointed by the probate court if no will exists.
Upon the principal's death, the executor or administrator's role begins, while the agent's role ends. They are responsible for gathering the deceased's assets, paying any debts or taxes, and distributing the remaining assets to the beneficiaries as specified in the will. This process occurs under the supervision of the probate court.
Trustees, on the other hand, are individuals or institutions appointed to manage a trust established by the principal. Unlike a POA or executor, a trustee's role does not necessarily end with the death of the principal. Instead, their responsibilities continue as outlined in the terms of the trust agreement, which may include distributing the trust's assets to beneficiaries.
In some cases, the agent may also be named as the executor or trustee. In such scenarios, their responsibilities could extend beyond the principal's death, but their role changes. As an executor or trustee, they are no longer acting under the authority of the POA but rather under the authority of the will or trust agreement.
