How to Make a Power of Attorney in Alabama FAQ

What Is a Power of Attorney?

A power of attorney is a legal document where you, as the “principal,” name someone you trust as your “agent” to handle your financial affairs, pay bills, and maintain support for you and your family. Generally, your agent does not make medical or health care decisions for you; you need a health care directive or health care power of attorney for that.

A financial power of attorney is important because if one day you cannot handle financial matters due to an incapacity, such as dementia, your family members will have to petition a court for conservatorship. The court appoints a conservator to handle your affairs, which takes time and money.

Who Can Be My Agent in Alabama?

An agent is someone you name to act on your behalf. It should be someone you trust since they have broad powers. They can access your bank accounts and personal information and bind you to contracts. The agent has a fiduciary duty to act in the principal’s best interest, or they will be liable. In Alabama, an agent must be a competent adult, but it is up to you to choose someone capable and responsible.

You may name co-agents in Alabama; they may act independently unless you state otherwise in your power of attorney document. However, co-agents may not be the best idea. If they act independently, they may have different objectives and contradict each other. If they must act jointly, there may be instances where they can’t agree, and nothing gets done.

It is better to name one agent and a backup or successor agent in case your primary agent cannot serve.

What Can My Agent Do in Alabama?

In a power of attorney document, you decide what powers to give your agent. Under Alabama law, you can grant general authority to your agent to do the following:

• Manage real estate transactions (buying, selling, or leasing real property)
• Handle your tangible personal property (buying, selling, or maintaining personal possessions)
• Buy or sell your stocks and bonds
• Manage your commodities and options
• Handle transactions with your bank or other financial institutions
• Run your business entities
• Manage insurance and annuity contracts
• Handle your estate, trusts, and other beneficial interests
• File lawsuits on your behalf or defend claims against you.
• Maintain support for you and your family
• Handle and apply for government or military service benefits
• Manage your retirement plans
• Handle tax matters
• Make gifts to others with your assets

There are also powers for which you must grant specific authority for your agent to handle in Alabama. These powers allow your agent to reduce your estate by giving away your property. For example, you may give your agent the power to:

• Create, change, or revoke a living trust
• Create or change rights of survivorship
• Create or change beneficiary designations
• Delegate their authority under the power of attorney
• Waive your right to be a beneficiary of a joint and survivor annuity

While some people do not want their agent to have this power, others may want their agent to reduce their estate for tax reasons or to qualify for need-based programs, such as Medicaid.

What Is a Durable Power of Attorney in Alabama?

A durable power of attorney lasts even if you are incapacitated. In Alabama, a power of attorney is durable unless you expressly provide that it terminates upon your incapacity. Generally, a licensed physician determines incapacity by evaluating the principal and states in writing that the principal can no longer manage their affairs.

When Is the Power of Attorney Effective?

Generally, a durable power of attorney begins once you sign your document. A springing power of attorney, however, becomes effective upon a specific date or event—for example, when you may be traveling outside the state or upon your incapacity.

When Does the Power of Attorney End?

The power of attorney ends when one of the following occurs:

• The death of the principal
• The agent dies, resigns, or is incapacitated, and there is not a backup agent
• The principal is incapacitated (if the power of attorney is not durable)
• The principal revokes the power of attorney
• The power of attorney has a termination date or termination event, and that event occurred
• The purpose of the power of attorney is achieved
• A court revokes the agent’s authority

Additionally, your agent’s authority ends if you revoke the authority, your agent dies, resigns, or becomes incapacitated, or your agent is a spouse you divorced or legally separated from. That is why it is a good idea to name a backup agent in your power of attorney document.

Does Alabama Have a Statutory Power of Attorney?

Yes. Alabama has a statutory power of attorney in Alabama code §26-1A-301. However, you do not have to use the statutory form as it is quite limited. There are better options for an Alabama will: create your power of attorney document customized to your needs or hire an estate planning attorney.

Can I Make My Own Power of Attorney in Alabama?

Yes, you can save time and money by using Alabama’s statutory form or online power of attorney documents made for Alabama to create your own. However, it may be best to consult an attorney for legal advice if you have questions about who should serve as your agent or what powers to grant your agent.

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How Do I Make My Power of Attorney Valid in Alabama?

Alabama state law has specific requirements to make your power of attorney valid. The principal must sign and date the document and be mentally competent. The principal can also direct someone to sign on behalf of the principal in their conscious presence. By having a notary acknowledge the principal’s signature, the signature is presumed to be genuine.

Do I Have to Notarize My Power of Attorney?

Yes. In Alabama, having a notary public attest to your signature proves your signature is genuine.

What Should I Do After Signing My Power of Attorney?

After you sign your power of attorney, you should share it with your agent, bank, and financial institutions. Your bank may want your agent to sign an Agent Certification form. Alabama has an Agent’s Certification as to the Validity of POA and Agent’s Authority Form in §26-1A-302, or they may have their own. In this form, your agent must make an oath in front of a notary that the principal is still alive, and that power of attorney is effective.

Does a Power of Attorney Agent Get Paid in Alabama?

That is up to you. Unless you provide otherwise in your power of attorney, an agent in Alabama is entitled to reimbursement for reasonable expenses incurred and reasonable compensation for serving as your agent.

Is My Alabama Power of Attorney Valid in Another State?

Yes. A valid power of attorney created according to the laws of Alabama will be honored in another state.

Can I Revoke My Alabama Power of Attorney?

Yes, you can revoke your power of attorney document and your agent’s authority as long as you are still alive and competent. You can draft a letter of revocation to share with your agent and any bank or financial institution with your original power of attorney document on file. You may want to destroy the original and any copies of the original power of attorney document.

What Estate Planning Documents Should I Have in Alabama?

A power of attorney is a helpful document when you are incapacitated and can’t manage your finances. Another critical document is a health care directive or advance directive.

A healthcare directive or living will allows you to name someone to access your healthcare records and make medical decisions on your behalf. It also lets you leave instructions on what life-prolonging measures you want or do not want when you have an end-stage illness or terminal condition.

Because a power of attorney ends at your death, you will need someone to manage your estate.

A last will and testament in Alabama lets you name someone to handle your estate (your personal representative or executor), name beneficiaries to inherit your property, and name guardians for your minor children. A will speeds up the probate process so your loved ones don’t have to spend a lot of time and money in probate court.

Fortunately, making a valid power of attorney and creating other Alabama estate planning documents is easy with online estate planning templates.