How a Maryland financial power of attorney can let an agent manage your money

This article explains, in plain language, what financial powers a named agent can exercise for you under Maryland law if you become unable to manage your finances. It uses general hypothetical examples to illustrate common situations. This is educational information only and is not legal advice. For specific legal guidance, talk to a licensed Maryland attorney.

What a financial power of attorney is (simple explanation)

A financial power of attorney (POA) is a legal document in which you (the principal) name another person (the agent or attorney-in-fact) to act on your behalf about money and property. The document spells out which powers the agent has and when the agent can use them.

How and when the agent’s powers take effect

You control when the agent’s authority begins:

Immediate (effective right away): The agent can act as soon as you sign the document.
Durable: If the POA includes durable language, the agent keeps authority even if you later become incapacitated.
Springing: The POA can be written to “spring” into effect only if a doctor or two doctors certify that you are incapacitated. Banks and institutions sometimes resist springing POAs because they require proof of incapacity.

Maryland recognizes durable powers of attorney. For practical steps and official information from the Maryland Judiciary, see the Maryland Courts self-help page on powers of attorney: https://www.mdcourts.gov/selfhelp/estate/powerofattorney.

Common financial powers an agent can be given in Maryland

When you draft a financial POA in Maryland, you can give broad or narrow powers. Typical authorities include:

Banking: access accounts, deposit and withdraw funds, endorse checks, open or close accounts.
Bill paying and household expenses: pay rent or mortgage, utilities, insurance premiums, and regularly occurring bills.
Real estate transactions: buy, sell, lease, mortgage, or manage property (note: many real estate actions require a notarized POA and may need recording).
Investment and brokerage decisions: buy and sell stocks, bonds, mutual funds, and manage investment accounts if the document grants that authority.
Tax matters: prepare, sign, and file tax returns; represent you before tax agencies; handle refunds or audits.
Business operations: run your business, sign contracts, hire or fire employees—if the POA explicitly permits.
Benefits and government programs: apply for or manage Social Security, veterans benefits, or public benefits; handle disputes or appeals.
Insurance and retirement accounts: maintain policies, make premium payments, and, where allowed, manage retirement accounts—though some institutions require extra steps for beneficiary changes.
Gifts and estate-planning acts: make gifts or transfers if the POA explicitly authorizes gifting. Because gifts can affect taxes and inheritance, this power is often limited or omitted unless explicitly granted.

Important limits and rules under Maryland practice

Health care decisions are separate: A financial POA generally does not give the agent authority to make medical or end-of-life health decisions. Use a separate health care advance directive for those powers.
Authority ends at death: An agent’s power stops when the principal dies. After death, the executor or personal representative handles the estate.
Fiduciary duties: Maryland requires agents to act in the principal’s best interest, avoid conflicts, keep accurate records, and follow any instructions in the POA.
Revocation: While you are mentally competent, you can revoke or change the POA. Many institutions require a written and notarized revocation and a copy of the new document.
Third-party acceptance: Banks, brokerage firms, and other institutions may require a specific form or notarization and can refuse an agent’s act if the document is unclear. Adding clear language, notarization, and providing the institution’s required form prevents delays.
Court oversight: If someone challenges the agent’s actions or believes the agent abused power, a court can review, limit, or remove the agent and order remedies.

Practical examples (hypotheticals)

These short hypotheticals illustrate how a Maryland financial POA often works:

Banking: If your POA names your sibling as agent with authority over banking, that sibling can go to your bank, present the POA, and arrange bill payments or transfer funds to pay your mortgage.
Real estate sale: If your agent has real estate power and you become incapacitated, the agent may sell an investment property to pay nursing-home bills—provided the POA explicitly authorizes real estate transactions and the sale follows any documented restrictions.
Taxes and benefits: Your agent could sign your income tax return and negotiate with the IRS or Social Security on your behalf if the POA includes tax and benefits authority.

How to make a POA work smoothly in Maryland

Follow these steps to reduce friction and protect yourself and your agent:

Use clear, specific language. List the powers you want to grant and any limits. If you do not want your agent to make gifts or change beneficiaries, say so explicitly.
Include durable language if you want the POA to continue after incapacity.
Sign the POA before a notary and any required witnesses. Notarization is especially important for real estate and for institutions that demand it.
Name successor agents in case your first choice cannot serve.
Give copies to your named agent, family members you trust, and to financial institutions you use. Keep the original in a safe but accessible place.
Tell banks and other institutions in advance where possible; confirm whether they require a specific form or additional ID.
Keep good records of transactions your agent makes on your behalf.

Where to find Maryland law and official guidance

For official guidance and sample forms from the Maryland Judiciary, see the Maryland Courts self-help page: https://www.mdcourts.gov/selfhelp/estate/powerofattorney.

For the statutory framework and text of Maryland laws related to powers of attorney and estate matters, review the Maryland statutes (Estates & Trusts) on the Maryland General Assembly website: https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=estate.

How to decide whether to use a POA and when to consult an attorney

A POA can prevent the delay, expense, and publicity of a court guardianship or conservatorship if you become incapacitated. But a poorly drafted POA can cause disputes or allow abuse. If you have substantial assets, complicated tax issues, a business, or family conflict, consult a Maryland attorney to draft or review the document.

Disclaimer

This article explains general principles of Maryland law for educational purposes only. It is not legal advice, does not create an attorney-client relationship, and is not a substitute for advice from a licensed attorney familiar with your situation.

Helpful Hints

Pick an agent you trust. Check their willingness and availability first.
Be specific in the document about powers you want—don’t assume broad terms cover everything.
Consider who will act as successor agent if the first agent can’t serve.
Notarize the document and ask whether your bank or broker needs additional forms.
Keep an up-to-date asset list and written instructions for routine matters (bill pay, taxes, subscriptions) to help your agent transition smoothly.
Review beneficiary designations; a POA does not change named beneficiaries on life insurance or retirement accounts unless the account holder updates them directly.
If you want to limit gifting powers, say so explicitly to prevent unintended tax or inheritance consequences.
Store the original where it’s accessible and provide certified copies to financial institutions when needed.
If you suspect misuse, contact an attorney quickly; Maryland courts can intervene to stop abuse and provide remedies.