Financial Power of Attorney Maryland: Agent Powers, Limits, and the 2023 Updates

A financial power of attorney in Maryland gives your agent authority over your money, property, and business affairs — but the scope of that authority depends entirely on how the document is drafted. Maryland's statutory form under Estates and Trusts § 17-202 provides a structured framework, and the 2023 legislative updates changed several default rules that affect Medicaid planning and asset transfers.

What a Financial POA Agent Can Do

Under the general grant of powers in the Maryland statutory form, a financial agent can:

• Access and manage bank accounts, certificates of deposit, and investment accounts
• Pay bills, manage debts, and handle credit obligations
• File federal and state tax returns and represent you before the IRS and Maryland Comptroller
• Collect government benefits including Social Security, Medicare, and veterans' benefits
• Manage insurance policies and file claims
• Operate or manage a business
• Handle legal claims, lawsuits, and administrative proceedings
• Buy, sell, lease, or mortgage real property (with recording requirements under RP § 4-107)

The agent acts as a fiduciary under ET § 17-113. This means they must act in your best interest, keep your assets separate from their own, maintain detailed records of every transaction, and avoid self-dealing unless specifically authorized.

What a Financial Agent Cannot Do Without Special Instructions

The statutory form strips agents of several critical powers unless the principal explicitly grants them in the Special Instructions section:

Gifting. An agent cannot make gifts of the principal's property — not birthday presents, not charitable donations, not annual exclusion gifts to family members. Without Special Instructions authorizing gifts, any transfer from the principal's assets to another person is a breach of fiduciary duty.

Trust operations. An agent cannot create, amend, or fund a revocable or irrevocable trust. This matters enormously for families trying to establish a Medicaid Asset Protection Trust as part of long-term care planning.

Beneficiary changes. An agent cannot change beneficiary designations on life insurance policies, retirement accounts, annuities, or payable-on-death accounts. This restriction prevents an agent from redirecting the principal's assets to themselves or to unintended parties.

Survivorship modifications. An agent cannot alter rights of survivorship on joint accounts or jointly held property.

The 2023 Legislative Updates

Senate Bill 851 and House Bill 18, effective in 2023, expanded the default powers available to agents under the Maryland statutory framework. The key change: agents can now engage in self-dealing transactions specifically for Medicaid planning and asset transfers when the principal's Special Instructions authorize these actions.

Before 2023, even agents with broad Special Instructions faced legal uncertainty about whether self-dealing for Medicaid spend-down purposes was permitted. The new provisions clarify that an agent can transfer assets to themselves or family members as part of a documented Medicaid planning strategy, provided the POA explicitly authorizes it.

This change matters most for families facing long-term care costs. Maryland Medicaid eligibility for a single applicant requires countable assets under $2,500. Transferring assets to protect them from Medicaid spend-down requirements — while navigating the 60-month look-back period — requires an agent with clearly documented authority.

The Fiduciary Duty of Loyalty

Under ET § 17-113, a financial agent owes the principal an absolute duty of loyalty. This means:

• No self-dealing unless explicitly authorized in Special Instructions
• No commingling of the principal's assets with the agent's own funds
• Detailed record-keeping of every transaction, including date, amount, purpose, and parties involved
• No use of the principal's assets for the agent's personal benefit

Breach of fiduciary duty exposes the agent to civil liability for actual damages, disgorgement of profits, and the principal's or estate's attorney's fees.

When the Agent's Authority Ends

A financial power of attorney terminates immediately and completely upon the principal's death under Maryland law. The agent cannot access bank accounts, sign checks, or complete transactions after death — even transactions that were in progress. Authority transfers to the personal representative appointed by the Register of Wills through probate.

The POA also terminates if the principal revokes it (requiring written notice to the agent and all institutions), if a court invalidates it, or if the agent resigns or becomes incapacitated without a named successor.

The Maryland Power of Attorney Kit includes Special Instructions templates for gifting authority, Medicaid planning, and trust operations, along with worksheets for documenting agent duties and record-keeping requirements.

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