Instrument: Power of attorney (POA)

What is it for?
The POA is an alternative to guardianship that allows an adult (the “principal”) to appoint one or more other persons (the “agent(s)”) to make property decisions for the principal.

What does it do?
A validly executed POA transfers property decision-making authority from the principal to the agent. Third parties are generally obligated to accept a duly executed POA with few exceptions, such as actual knowledge that the POA had been terminated, and may be liable for damages if they fail to do so. Ala. Code § 26-1A-120. Third parties may request that the agent certify in writing that the POA is valid. Ala. Code § 26-1A-119.

In acting on the principal’s behalf, the agent must follow the principal’s reasonable expectations, act in good faith, and act only within the scope of authority granted in the POA instrument itself. If the principal’s expectations are unknown, the agent must make reasonable efforts to ascertain the principal’s expectations. Otherwise, the agent must act in the principal’s “best interest.” Ala. Code § 26-1A-114.

The POA is durable unless the POA expressly provides that it is terminated by the incapacity of the principal. Ala. Code § 26-1A-104.

How does one make it?
A POA must be signed by the principal or in the principal’s conscious presence by another individual directed by the principal to sign the principal’s name on the POA. A signature on a POA is presumed to be genuine if the principal acknowledges the signature before a notary public or other individual authorized by law to take acknowledgments. Ala. Code § 26-1A-105.

When does it come into effect?
Immediately, unless the POA specifies otherwise, such as based upon the occurrence of a future event or contingency. If the POA specifies that it becomes effective in the event of the principal’s incapacity, and the principal has not specified a person to determine whether the principal is incapacitated, or the person authorized is unable or unwilling to make the determination, the agent’s power becomes effective upon a determination in a writing or other record either by a physician, licensed psychologist, an attorney-at-law, a judge, or an appropriate governmental official that the principal is “incapacitated” as defined by either Ala. Code § 26-1A-102(5)(A) or (B). Ala. Code § 26-1A-109.

How long does it last?
The POA ends when the principal dies; the principal becomes incapacitated (if the POA is not durable); the principal revokes the POA; the POA provides that it terminates; the purpose of the POA is accomplished; the principal revokes the agent’s authority; or the agent dies, becomes incapacitated, or resigns, and the POA does not provide for another agent. Ala. Code § 26-1A-110..

How does one end it?
The principal may revoke a POA, but Alabama law does not expressly state how the principal does so. (Alabama law does specify how a principal can revoke a health care POA, however, at Ala. Code § 26-1-404(c)(1).) Execution of a subsequent POA does not automatically revoke a prior POA unless the subsequent POA expressly provides. Ala. Code § 26-1A-110.

What does an example look like?
Alabama law provides a statutory form at Ala. Code § 26-1A-301. Relatedly, an “Agent’s Certification” form is provided at Ala. Code § 26-1A-302. Also, the Alabama Cooperative Extension System provides a sample form here.

What else should one know?
Alabama’s POA is based on the Uniform Power of Attorney Act. Note that POAs executed prior to January 1, 2012 are governed by Ala. Code § 26-1-2.

Last updated April 2021

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