Who Needs a Power of Attorney and Why?

A power of attorney is a legal document that gives a designated individual, known as an attorney-in-fact or agent, the authority to make decisions for another person. The laws for appointing a power of attorney vary from state to state.

Who Can Create a Power of Attorney?

 To create a power of attorney document in Maryland, an individual must:

•  Be at least 18 years old
• Intend to give the power to the person designated
• Be mentally competent

Types of Power of Attorney Designations

There are broad types of decisions that an agent can be given the power to make under a general power of attorney, including:

• Handling financial decisions and banking transactions
• Entering safety deposit boxes
• Giving gifts of money
• Buying and selling property
• Entering into contracts
• Exercising stock rights
• Filing tax returns

Besides a general power of attorney, there are various other types of limited powers of attorney that can appoint an individual or organization to act in a certain capacity, depending upon the powers defined in the document:

• A special power of attorney authorizes an agent to act on the designator’s behalf only in specific situations.
• A health care power of attorney authorizes an agent to make health care decisions for someone should they become unconscious, mentally incompetent, or incapacitated.
• A durable power of attorney gives an agent the general, special, and health care powers of attorney and takes effect or remains in effect should the designator becomes mentally incompetent.

Who Can Be an Attorney-in-Fact?

A spouse, adult child, other relative, or a trusted friend can be an attorney-in-fact, as long as he acts in good faith on behalf of the designator. Because the actions of an attorney-in-fact are considered to be the legal actions of the principal, a decision regarding designating a power of attorney should not be made lightly.