In Maryland, many people are told about the value of a power of attorney in an estate plan but do not fully understand what it does. In order to fully incorporate its use in the estate plan, it is vital to be familiar with the instrument and its uses.
Giving a power of attorney allows a person to act on behalf of the other. The authority that they have is defined by what is in the instrument. In other words, the power of attorney can be a financial or a medical one. In some cases, one person can have both of these authorities. It is up to the person granting the power to decide the scope of it. The power of attorney can even be limited to one specific type of account.
Sometimes, people can grant multiple different powers of attorney. This may be the best approach as people will generally want to keep it simple when giving someone else the authority. It is best that they know exactly what their authority is and the scope of it. Making it too broad and amorphous can create confusion. It is better to work with several of these designations, specifically spelling out the exact nature of the authority so that nobody is left in the dark about what they should be doing.
An estate planning attorney may help define and draft the powers of attorney so that they are as specific as possible. This may reduce the chances that there will be some confusion or people acting improperly. Many times, people do not know what they can and should put in these documents. An estate planning attorney might help educate their client as to the possibilities for this document and recommend the best structure for the client’s powers of attorney.