Most people are familiar with a last will and testament, which ensures that your wishes are carried out when you pass. But estate planning can and should also protect you and your family if you become incapacitated. A financial power of attorney, often called a POA, is one of the most important and useful documents you can have in place.
At The Weeks Law Firm, we help families across Anne Arundel County and throughout Maryland create POAs and other estate planning documents tailored to their individual needs.
Why should I have a financial power of attorney?
A financial POA lets you name a trusted individual to handle your money and property if you cannot do it yourself. That might mean a short-term situation, like recovering from surgery, or a longer one, like dementia.
Without a POA, your family may not be able to act on your behalf. Banks may refuse to talk to them. Bills could go unpaid. Your spouse or adult child may have to ask a court for guardianship to act on your behalf. That process can take time and money during an already stressful period.
A financial POA solves this in advance. Your agent can:
- Handle your financial accounts and pay your bills
- File your taxes
- Manage your investments and real estate
- Step in immediately if you become incapacitated to the point that you are unable to manage your own affairs
What are the risks of a financial power of attorney?
A POA gives someone real authority over your money and other property. The biggest risk is choosing the wrong agent. An agent with bad intentions, or bad judgment, can cause real financial harm. Financial abuse does happen, especially with older adults.
You can lower these risks by:
- Choosing someone you trust completely, who may not be your oldest child or closest relative
- Naming a backup agent who can step in if your first choice cannot serve
- Limiting the powers granted if you only want certain matters covered
Having an attorney work with you to draft the document properly also helps. A well-written POA spells out exactly what your agent can and cannot do, which protects both of you from confusion or disputes later.
Is there a difference between a POA and a financial POA?
Yes. “Power of attorney” is a broad term. It can cover financial matters, healthcare decisions, or both. A financial power of attorney deals specifically with money, property, and business affairs. It is separate from a medical power of attorney. In Maryland a healthcare power of attorney and a living will are usually combined and called an advance directive.
Anyone over the age of 18 should have an advance directive and a financial power of attorney. A financial POA covers your accounts, bills, and property. An advance directive covers medical decisions. Together, they give you a complete plan in the event of your incapacity.
Can someone with POA withdraw money from a bank account online?
Yes, if the document grants that authority and the bank has the POA on file. Once a bank accepts a financial POA, your agent can generally manage your accounts the way you would, including online banking and bill pay, depending on the powers granted.
This is exactly why choosing the right agent matters so much. Online access makes it easy for an agent to help quickly, but it also means there is little built-in oversight. Some institutions need a physical copy of a POA before honoring it, so it helps to give your agent a copy before it is needed.
What are the signing requirements for financial POAs in Maryland?
Maryland has specific rules governing the execution of a financial POA (Md. Code, Estates & Trusts § 17-110). A financial power of attorney signed on or after October 1, 2010, must be:
- Signed by you, the principal, in front of a notary public
- Witnessed by two adult witnesses who are not your named agent
- Acknowledged before the notary, who may also serve as one of the two witnesses
That means at least three people need to be present for the signing. Skipping these steps, or using an outdated form, is one of the most common reasons banks reject a POA right when it is needed. The Maryland People’s Law Library has helpful background on these requirements and on Maryland’s Power of Attorney Act.
What is a springing POA?
A springing power of attorney does not take effect right away. Instead, it “springs” into effect after a specific triggering event, usually a determination that you have become incapacitated. This often requires written certification from one or more doctors confirming that you can no longer manage your own affairs.
Some people like the idea of a springing POA because it feels safer. Your agent has no power until it is actually needed. In practice, though, this can create delays. Getting a doctor to certify incapacity takes time, and during a crisis, that is often the time your family does not have.
What is a durable POA?
A durable power of attorney remains in effect even after you become incapacitated. Unlike a standard POA, which can become invalid the moment you can no longer make your own decisions, a durable POA keeps working when you need it most. In Maryland, a POA is automatically considered durable unless the document says otherwise (Md. Code, Estates & Trusts § 17-105). Most well-built estate plans include a durable POA.
Why a durable, non-springing POA is the right document for most people
For most people, a durable, non-springing financial power of attorney is the right option for their estate plan. The purpose of this document is to let someone manage your own affairs when you cannot. It is most helpful if is already active when that happens. A durable POA survives your incapacity automatically. There is no waiting period, no doctor’s evaluation, and no court filing required before your agent can step in. Your bills get paid, and your accounts stay in order. A springing POA may sound safer, but in reality, it often adds delay and extra steps. For immediate protection if you become incapacitated, having a durable non-springing POA in place is almost always the correct choice.
The Weeks Law Firm can help you plan ahead
The Weeks Law Firm helps individuals and families throughout Anne Arundel County and all of Maryland create or update their estate planning documents. Whether you are starting your estate plan from scratch or need to update an outdated POA, I would be happy to help you. Schedule a free consultation to ask any questions and discuss your next steps.
This article is for general informational purposes and is not legal advice. For guidance specific to your situation, consult a licensed Maryland estate planning attorney.
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