Estate Planning Tools: Power of Attorney

An concept Image of a power of attorney by ULF from Adobe Stock Images.

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Introduction:

The tools used in the estate planning process will reflect the individual’s goals on distributing their property and assets, as well as plans for continuing the family farm and placing the proper family members in charge of business and health decisions that could arise if the individual becomes incapacitated. Three tools used when an individual is no longer able to make proper decisions are a durable power of attorney, healthcare proxies, and advance healthcare directives, also known as living wills.

These three tools do not involve distributing a person’s property, but rather how to make health and business decisions if the person is no longer able to make those decisions. Durable powers of attorney and health care proxies appoint a representative or agent to act on behalf of a person in the event the person becomes incapacitated. A living will specifies the type of medical treatments the person would like to receive or forgo.

Real Life Examples

Regular Example:

For example, Beverly is widowed and has one daughter, Jasmine, who is married to Caleb.  Jasmine and Caleb live near Beverly and often help Beverly out around the house and take her to appointments.  Suppose Beverly has a durable power of attorney naming Jasmine as her agent. In that case, if something happens to Beverly, Jasmine will be able to step in and continue to pay bills and make other non-health care decisions for Beverly. At the same time, if Beverly has a healthcare proxy naming Jasmine as her proxy, then Jasmine can make health decisions on her behalf.  Finally, by having a living will, Beverly has stated the types of care she wants in situations involving being placed on life support or being resuscitated, which will take the burden off Jasmine and Caleb to decide what Beverly would wish.

Agricultural Example:

For example, Bill runs a farming operation; his adult son, Tom, works for him, and Bill’s wife has predeceased him. One day, while working on the farm, Bill is severely injured and falls into a coma. If Bill has a durable power of attorney naming Tom as his agent, then Tom will be able to step into Bill’s shoes in the farming operation and make decisions as if he is Bill. If Bill has named Tom as his health care proxy, then Tom would be able to step in and make those medical decisions necessary to keep his dad alive. Finally, with a living will Bill would be able to specify the medical care he would like to receive or not. For example, Bill may have decided to forgo the use of a ventilator or respirator in certain situations.

Mode of Protection	Durable Power of Attorney	Healthcare Proxies (Medical Power of Attorney)	Advanced Health Care Directives (Living wills)
Definition	a legal document by which a principal designates another person as their attorney-in-fact or agent, granting them authority to act on the principal's behalf, but does not automatically include healthcare decision-making authority unless specifically stated	It refers to the appointment of an agent (proxy) who is authorized to make healthcare decisions on behalf of the principal and is a specific component of an advance directive.	An advance directive is a broader legal document that allows an individual (the declarant) to outline their healthcare preferences and appoint an agent to make healthcare decisions on their behalf if they become incapable of making informed decisions
Who is the agent usually?	Must be someone the principal trusts to act in their best interest and within the scope of authority granted in the power of attorney	Any competent individual may, at any time, make a written or electronic advance directive regarding the provision of health care to that individual.  In the absence of a validly executed or witnessed advance directive, any authentic expression made by an individual while competent of the individual’s wishes regarding health care for the individual shall be considered.
Disqualified Persons	1. An owner, operator, or employee of a health care facility from which the declarant is receiving health care; or 2. A spouse, parent, child, or sibling of an owner, operator, or employee of a health care facility from which the declarant is receiving health care. 3. An individual subject to an interim, temporary, or final protective order, and the declarant is a person eligible for relief under that order Exceptions: Md. Health-General Code Ann. § 5-602 (b)(3)
Powers	can be broad or specific, depending on the terms of the document Common powers include:  conducting banking transactions,  managing real estate,  making investments,  handling insurance,  pursuing litigation, and  collecting debts.  making gifts  appointing a successor agent	Healthcare proxy's authority becomes effective when the principal is certified as incapable of making an informed decision by an attending physician.  Powers include: medical treatment,  life-sustaining procedures end-of-life care withholding, or withdrawal of health care	The principal has the power to outline their healthcare preferences and appoint their agent in this larger legal document.
When does the power terminate?	terminates upon the principal's death,  revocation of the power by the principal,  other specified events, such as the completion of the purpose of the power of attorney	terminates upon the principal's death Revocation through a signed and dated written or electronic document, physical cancellation, or destruction of the directive  An oral statement to a healthcare practitioner requesting revocation or the execution of a subsequent directive Exception: unless the principal has explicitly waived the right to revoke during a period of incapacity
Assigning more than one agent?	In Maryland, you can assign more than one durable power of attorney or health care proxy, as well as alternate agents. If coagents are designated, they must act unanimously unless the power of attorney. However, seeking advice from a legal professional is encouraged to figure out the best way to instruct coagents on how to work together (jointly or independently).

Note: If a guardian is appointed for the principal, the agent must account to the guardian, who has the authority to revoke or modify the power of attorney

Although healthcare directives and living wills are used interchangeably. The main difference is that an advanced healthcare directive appoints a healthcare agent, whereas a living will does not necessarily have this component. Below is a chart highlighting the differences between them:

Feature	Living Will	Advance Healthcare Directive
Scope	End-of-life treatment choices	Broader: includes living will + healthcare agent
Includes Decision-Maker?	❌ No	✅ Yes (usually appoints a healthcare agent)
When Used	Terminal illness or irreversible coma	Any time you’re unable to make decisions
Flexibility	Less flexible	More flexible and comprehensive

Glossary

Advanced Health Care Directives  - A broad legal document outlining the principal's healthcare preferences and appointing their healthcare proxy if they were to become incapacitated.

Agent - An Individual designated to carry out the legal document they are bound to

Durable - the agent's authority persists during periods of the principal's disability or incompetence, and actions taken by the agent during such periods are binding on the principal as if the principal were alive, competent, and not disabled

Durable Power of Attorney - a person designated by the principal as their agent, granting them authority to act on the principal's behalf, including a broad range of power over the principal's assets

Principal - an individual who grants authority to an agent to act on their behalf

Healthcare Proxies - Also known as a Medical Power of Attorney, is an agent appointed to carry out the wishes of the principal in regards to medical treatment and end-of-life care

Living Will - a type of advanced directive regarding end-of-life treatment choices, but does not require a healthcare proxy

References

Md. Code Ann. Est. & Trusts § 17-105.

Md. Code Ann. Est. & Trusts § 17-108.

Md. Code Ann. Health–Gen. § 5-601.

Md. Code Ann. Health–Gen. § 5-602.

This work is supported by the Northeast Extension Risk Management project award no. 2024-70027-42540, from the U.S. Department of Agriculture’s National Institute of Food and Agriculture.