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Understanding Alabama’s Uniform Power Of Attorney

power of attorneyOn 1st January 2012, Alabama became the 10th state in the country to enact into law the uniform power of attorney act. If you are interested in learning more about Alabama’s uniform power of attorney law, then continue reading.

Principal and agent

Quite a number of terms are defined under this law with two of the most notable ones being principal and agent. Principal refers to an individual who entrusts another individual (agent) with the power to perform various tasks and actions on his or her behalf. The agent is also referred to as an attorney-in-fact. Once given power of attorney, the agent can undertake both financial and administrative duties. In some cases, he or she can also handle special tasks, for example, selling a home on behalf of the principal.

Durable and Non-Durable

A power of attorney can either be durable or non-durable. What does durability mean here? When a POA is said to be durable, it simple translates to the fact that it will be relevant even after the principal becomes incapacitated. A non-durable POA, on the other hand, becomes obsolete as soon as the principal becomes incapacitated. A power of attorney is automatically considered to be durable unless stated otherwise.

According to the law, a durable power of attorney can come into effect immediately after being executed or after the principal becomes incapacitated. If the latter is what is agreed on, but a person is not designated to make the determination on whether incapacity has occurred on the part of the principal or not, then the law states who will be tasked with that responsibility.

Definition of Incapacity

It is worth noting that incapacity does not just refer to the inability to make decisions as a result of mental and/or physical afflictions. If the principal goes missing; is detained or happens to be out of the country and cannot return for one reason or another, he/she is also considered to be incapacitated.

The power of attorney law defines the specific powers that are transferred to the agent once the principal becomes incapacitated. To look at it generally, the POA gives an agent the power to do what the principal could do (had he/she had the capacity) with regard to the various assets and benefits.

There are certain powers that must specifically be stated in the power of attorney otherwise they will not be passed to the agent once it comes into effect. These include fiduciary powers, changing or creating survivorship rights, creating or changing beneficiaries just to mention a few. The reason why this is the case is because the law was created under the assumption that the average principal wouldn’t want their agent to automatically possess the aforementioned powers.

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