Power of attorney is one important aspect of estate planning of which Maryland residents may wish to be aware. However, there are two different types of power of attorney: financial and health. Understanding the differences and how they are used may well be essential to proper estate planning.
A financial power of attorney is a document that gives someone else, called the agent, authority to make financial decisions on your behalf. It can be written broadly or as narrowly as desired, and it may also be drafted such that it is only effective in the event that that you become incapacitated. Furthermore, the incapacity itself can be defined within the financial power of attorney.
The health-care power of attorney is somewhat similar. But instead of giving someone else financial authority, they are given health-care authority. Thus, in the event of incapacity, which is defined within the document, the agent is authorized to make medical decisions. This could prove beneficial when an unexpected accident or calamity renders you unable to communicate.
Yet just as a properly drafted power of attorney may prove to be of tremendous benefit to Maryland residents, an improperly drafted power of attorney could cause significant problems. Although forms exist online, these forms often contain errors or ambiguities. However, an estate planning attorney may be able to help draft a document that not only may avoid such drafting errors but which also pertains to your unique situation. Of course, a power of attorney is just one aspect among many in estate planning, and a well-rounded estate plan may take into account many contingencies.
Source: Agri-View, "Five documents of estate planning detailed," Jane Fyksen, April 6, 2012