The Responsibilities Of A Personal Representative and Power Of Attorney Agent

My mother has named me as her Personal Representative in her Last Will and Testament. She also wants me to handle her financial affairs for her now.  Does she need to sign a power of attorney naming me as her agent, in order for me to handle her financial affairs, or will my appointment as her Personal Representative permit me to do so.  From; Concerned daughter

Dear Concerned Daughter:   Unfortunately, you cannot use your appointment as your mother's Personal Representative to handle her financial affairs during her lifetime. This is because under Maryland law, when a person is appointed as Personal Representative in a Will, that person's authority to act for the principal does not become effective until the principal dies, and the Register Of Wills approves that appointment by issuing letters of administration to the a person appointed as Personal Representative. Therefore, if your mother would like you to handle her financial affairs during her lifetime, she would be wise to sign a power of attorney appointing you as her attorney in fact or agent now, while she is competent to do so. If your mother becomes incompetent, she will no longer have the ability under the law to execute a power of attorney. If someone is needed to be appointed to handle her personal and/or financial affairs, that person will have to file a petition for guardianship with the court. Again, if your mother feels comfortable in appointing you to be her agent, that makes sense for her to do so now, because guardianship is a complicated and more costly alternative.

If your mother chooses to execute a power of attorney, and wants to grant you powers broad enough to enable you to handle all of her financial affairs, then she should consider signing a general power of attorney, rather than a limited power of attorney. Generally a limited power of attorney only grants an agent specific limited powers. It is important that the powers stated in the power of attorney be specifically stated, so as to minimize challenges to the agent's authority.

It is also important that powers of attorney be "durable", so that the authority granted will continue to be in full force and effect, even if the principal (in this case your mom), becomes incompetent. Under Maryland law, all powers of attorney are considered to be "durable". Despite this however, I generally recommend to clients that their power of attorney specifically state that the document is durable, in any event the principal moves to another state that does not recognize powers of attorney as being durable, as Maryland does.

In summary, powers of attorney are an effective tool to provide for the management of a person's assets. If, however, a person does not know of any individual whom they can trust to handle their financial affairs, then possibly guardianship is the only viable alternative. Also, if a person has assets requiring more hands-on management, or are located outside of the State Of Maryland, or for other reasons, then he or she may consider executing a revocable living trust, in addition to a power of attorney.

Published in the Spring 2011 issue of OutLook By The Bay magazine.