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Proy Law Firm
PO Box 499
Finksburg, Maryland 21048

Telephone: (443) 352-8517
Fax: (443) 451-3345
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8.4Nicholas Bernard Proy
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Main Page >> Practice Areas >> Wills, Trusts and Estate Planning >> Powers of Attorney

 

Durable Financial Powers of Attorney and Medical or Healthcare Powers of Attorney

 

Every estate plan, whether utilizing a will or a will and a trust, must include powers of attorney. Generally speaking, powers of attorney allow an individual (the "agent") to act on behalf of another (the "principal").

 

With a durable financial power of attorney, the agent can carry out financial transactions on behalf of the principal if the principal is unable to do so. This can include everything from buying and selling stocks, bonds, real estate and motor vehicles to selling the principal's assets for the benefit of the principal. A durable financial power of attorney can also appoint a guardian for the principal in the event of the principal's disability.

 

With a medical or healthcare power of attorney, the agent can make healthcare decisions on behalf of the principal if the principal is unable to do so. The agent often incorporates a separate living will or advance directive when carrying out the principal's wishes. A medical or healthcare power of attorney can also give the agent access to the principal's healthcare records without violating the Health Insurance Portability and Accountability Act (HIPAA).

 

Common Mistakes with Powers of Attorney:

(1) The number one mistake with estate planning is an individual not having any powers of attorney in place before a disability. Powers of attorney are like any other legal document where mental competency of the signer is required. If an individual lacks the proper mental competency, they cannot legally execute legal documents, which includes durable financial powers of attorney, medical or healthcare powers of attorney, wills and trusts.

 

(2) Some individuals try a do-it-yourself approach to estate planning and neglect either their durable financial power of attorney or medical or healthcare power of attorney. Often times form books and website-created forms will leave an individual under the impression that they need only a will or a trust, when in fact they need powers of attorney to be completely protected with their estate plan.

 

(3) Following up on the do-it-yourself approach to estate planning, both Maryland and Pennsylvania have very specific requirements for both durable financial powers of attorney and medical or healthcare powers of attorney. It is imperative that an individual's powers of attorney follow the requirements of these laws because the consequence for not following them could be an invalid power of attorney, which of course will be discovered during a time of need.

 

(4) Sometimes a principal will sign a medical or healthcare power of attorney, then fail to appropriately distribute the document. Once a medical or healthcare power of attorney is signed, copies should be given to healthcare providers to place in your medical file.

 

 

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