A power of attorney, which enables another party to decide on your behalf in the event of incompetence or incapacity, is a common element of estate planning. If an adult becomes incapacitated, and there is no power of attorney in place, an interested party can petition to have a guardian appointed to make important decisions on behalf of the disabled person.
With reports stating that, by 2040, 80 million Americans will be age 65 or older, it is vitally important to have plans in place, for both ourselves and loved ones, for the incompetence that frequently comes with advanced age. 2023 saw Maryland pass new laws with significant impact on both powers of attorney and guardianships, particularly regarding the power extended to the appointees.
The Maryland General Assembly passed a new bill, effective October 1, 2023, significantly changing the statutory Power of Attorney form, the MD Statutory POA 2023. This new legislation expands the abilities of agents under a Power of Attorney agreement regarding gifting and government benefits. An agent can make certain gifts on the principal’s behalf for Medicaid planning or to qualify for other public assistance. This change was made hoping to make the transfer of a senior citizen to a nursing facility easier by expediting the benefits approval process.
MD Statutory POA 2023 also changes the terms of compensation for the agent. Before, an agent was entitled to reimbursement for reasonable expenses but was not entitled to compensation unless terms were explicitly included in the agreement. Under the new law, the principal must include explicit language in the agreement regarding compensation for the agent.
Other new powers available to Maryland POAs include buying and selling untitled tangible personal property, appointing a successor agent, and creating joint accounts with the principal. These powers are all on an opt-in basis.
If you have a Power of Attorney executed before the effective date of MD Statutory POA 2023, it will not automatically become invalid. However, it may not be accepted by all financial institutions. If you have questions about your current power of attorney about the new legislation, contact us or your financial advisor.
In October 2022, Maryland passed a law allowing disabled or incapacitated adults to use supported decision-making (SDM) services as an alternative to guardianships. Nineteen other states, as well as the District of Columbia, have supported decision-making agreement (SDMA) laws. Recent years have seen an increase in reports of court-appointed guardians who abused their positions and stole from their wards, resulting in calls for reforms in the system. SDM is championed by disability rights advocates as a way for disabled adults to remain independent and be less vulnerable to the abuse that can occur in guardianship.
As the name suggests, SDM is a manner of assisting disabled or incompetent adults in deciding for themselves. In traditional guardianships, the guardian gains access to the ward’s finances and can make important decisions without having to consult the ward. In supported decision-making, the supporter serves as an assistant to the disabled adult, offering guidance on health and financial matters, but the adult makes the final decision. SDM agreements are customizable to the adult’s specific needs, and they can give the supporter as much or as little power as they wish. The adult also chooses their supporter, as opposed to guardianships, where the guardian is often selected by a petitioner or appointed by the court. Maryland’s new law requires that supported decision-making be explored as an option for disabled/incompetent adults before pursuing guardianship.
To know if an SDM agreement is right for the elderly or a disabled loved one, call the attorneys at Altman & Associates at 301 468 3220 or through our website at altmanassociates.net.
