Recent Changes to Power of Attorney Laws in Maryland


Powers of attorney allow individuals to designate someone else to make legal, medical, or financial decisions on their behalf if they become incapacitated. The laws governing power of attorney in Maryland have seen some important updates in recent years that residents should be aware of. Here are some of the key changes:

The Maryland legislature passed a Power of Attorney Act in 2010. The act provides two statutory forms that make it easier for people to grant powers to others to act for them on financial and other matters. The act is called the Maryland General and Limited Power of Attorney Act; it is in MD Code Estates & Trusts, Title 17.

Expanded Default Powers (House Bill 1095 (Chapter 679))

In 2017, the Power of Attorney Act under Maryland law was updated to expand the default powers granted to an agent under a power of attorney. Under the new law, agents have the power to make gifting decisions, DISCLAIM property, and change rights of survivorship or beneficiary designations unless otherwise limited by the power of attorney document. This gives agents more flexibility to handle issues like Medicaid planning without the need for specific gifting authority.

This bill made several notable changes, including:

  • Expanding default powers for agents under power of attorney unless expressly limited
  • Allowing digital/electronic signatures on power of attorney documents
  • Requiring third parties to notify agents if refusing to accept a power of attorney
  • Modifying witnessing and notarization requirements
  • Allowing out-of-state agents for Maryland residents

Digital Signatures Permitted

Beginning in 2017, and as of October 1, 2022, Maryland law permits powers of attorney to be executed using digital signatures. This allows documents to be signed electronically rather than requiring wet ink signatures. The use of digital signatures can make it much easier to get documents signed efficiently. The law still requires that signatures be witnessed and properly notarized. While the law allows for the execution of POAs digitally, not all parties provided an electronically signed POA have been willing to accept the POA, as described below.

Notification Requirement for Third Parties

The 2017 law imposed a new requirement for third parties like banks or brokerages to notify agents if they refuse to accept a power of attorney. The written notice must explain the reason for the refusal. This helps ensure agents understand what changes may be needed to get the power of attorney accepted.

2023 Updates to Maryland’s Power of Attorney Laws Maryland General and Limited Power of Attorney Act – Alterations SB 851/HB 18 (Chapters 697 and 696) (effective October 1, 2023)

New legislation in Maryland has expanded the abilities of agents under powers of attorney when it comes to gifting and government benefits.

Effective October 1, 2023, changes to the law authorize agents to make certain gifts on the principal’s behalf to qualify for governmental programs or benefits.

Specifically, the statutory forms for general and limited powers of attorney now allow agents to engage in self-dealing transactions for the purposes of Medicaid planning or qualifying for other public assistance. Previously, POA holders were stymied in Medicaid Spend Downs, because of the limitations in the prior law, and it is hoped that the new changes will facilitate these transfers to make Marylanders’ entry into a nursing facility easier on their family members, as the changes are hoped to expedite approval for benefits.

This change gives agents more flexibility to handle issues like transferring assets or making gifts to help the principal obtain government benefits like Medicaid. However, consultation with an estate planning attorney is still recommended when crafting financial powers of attorney. Overall, the recent updates to Maryland’s power of attorney laws make these important estate planning tools more flexible and easier to use. With digital signatures permitted and default powers expanded Maryland residents can more easily put powers of attorney in place. Being aware of the notification requirement also helps agents overcome any refusal to accept their authority. With proper advice from an estate planning attorney, Maryland residents can take full advantage of powers of attorney.

Thinking of electronically executing your POA? There are a few potential challenges that have arisen with allowing digital signatures on powers of attorney in Maryland:

  • Technical issues – There can be problems with getting digital signatures properly executed if the signers are not familiar with using electronic signature technology. The platforms and processes involved may present a learning curve.
  • Resistance from third parties – Even though laws require acceptance of digital signatures, some financial institutions, medical facilities, etc. have been reluctant to accept them on powers of attorney. They may claim security concerns.
  • Lack of signature witnessing – With wet ink signatures, the witnesses are physically present when the document is signed. With digital signatures, there is less ability to visually confirm the signature process was properly witnessed.
  • Confirming identity – With in-person wet ink signatures, the notary can physically verify the identity of the signers. Digital signatures rely on other identity confirmation processes that some claim are less secure.
  • Recordkeeping challenges – Long-term storage and retrieval of digital documents can present records management issues versus paper documents.
  • Legal uncertainties – The validity and enforceability of digitally signed documents is still evolving in the courts. There may be some uncertainties until case law builds up.

Over time, many of these challenges are likely to lessen as technologies and processes mature and become more commonplace. However, Maryland elders and their estate planning attorneys should be aware of the potential disadvantages of digital signatures today and take steps to ensure they are implemented carefully. Proper witnessing procedures and identity verification are key. When our office executes a POA, we prefer in-person signatures, with two witnesses and a notary, all live, together, and in the same space. Our best practice may make execution more cumbersome, but significantly reduces the likelihood that the agent will have challenges in the administration of the POA. We think the trade-off of convenience for certainty is well worth the extra effort for execution.

Supported Decision-Making in Maryland: A New Option to Protect Autonomy for People with Disabilities in Maryland

Maryland recently authorized a new tool called supported decision-making agreements to help adults with disabilities maintain autonomy in making life choices. With a supported decision-making agreement, a disabled adult can choose a trusted “supporter” to help understand, communicate, and make decisions. However, the supporter cannot independently act on the adult’s behalf. Here’s an overview of how these agreements work practically in Maryland.

Adult supporters can attend meetings with professionals at the disabled adult’s request and help gather relevant information. The goal is to avoid or limit guardianship by providing greater autonomy. Supporters cannot make decisions or act independently – they supplement, not replace, existing agents and guardians.

In general the law:

  • Allows adults with disabilities to choose a supporter to assist with decisions, without transferring legal authority.
  • Avoids guardianship which can restrict rights. Supporters help gather info, provide guidance, and assist communication.
  • Outlines required SDM agreement terms on rights, responsibilities, and role of supporter.
  • Supporter has no authority to independently make decisions. Instead, they facilitate the individual’s decision-making.
  • SDM agreements work with, not replace, other arrangements like power of attorney.
  • Power of attorney grants decision-making authority to another.

With SDM, individuals maintain autonomy and self-determination with assistance from trusted supporters.

If you have any questions about the recent changes to the power of attorney laws in Maryland, or you’re looking to craft a comprehensive estate plan, simply contact JDKatz, P.C. today.