Baldwin County Estate Planning Attorney – Power of Attorney
What is a Power of Attorney?
A power of attorney is a document used to appoint another person (your agent) to carry out certain transactions. The person who grants the power to the agent is the principal. The power of attorney specifies the different authorities granted by the principal to the agent.
When Does a Power of Attorney Become Effective?
The power of attorney may be effective immediately or “springing.” A springing power of attorney becomes effective on the happening of some future event, for example, the incapacity of the principal. A springing power of attorney is typically used for incapacity planning as part of modern estate planning. By using a springing power of attorney, the principal can designate another person, usually a family member, who will have authority out financial transactions on behalf of the principal in the event of the principal’s incapacity.
What is a Durable Power of Attorney?
A power of attorney used for estate planning is commonly called a durable power of attorney – durable meaning that the power of attorney remains valid through the incapacity of the principal. Prior to the enactment of the Alabama’s current power of attorney statute, a power of attorney wasn’t durable (valid through the incapacity of the principal) unless it was specifically provided within the power of attorney document. Under the current power of attorney statute, every power of attorney is a durable power of attorney unless otherwise provided.
What Are the Rules for the Person Named in the Power of Attorney?
The agent under the power of attorney assumes the duty to carry out the position according to standards prescribed by law. In addition to other duties, the agent is held to a fiduciary standard. In other words, any action taken under the power must be taken in the best interest of the principal. The fiduciary standard generally prohibits the agent from using the power of attorney to take actions that benefit the agent to the detriment of the principal.
Who Can Make a Power of Attorney?
To make a power of attorney, a person must have the requisite mental capacity required by law. In Alabama, to have the capacity to make a power of attorney, the principal must be able to understand and comprehend what he or she is doing.
How to Revoke, Terminate or End a Power of Attorney?
There are a few different ways to revoke a power of attorney. The preferred method is to create a new power of attorney which states that any previous power of attorney documents are revoked.
The Law Office of Brenton C. McWilliams is an Estate Planning, Elder Law and Probate Law Firm serving clients in Baldwin County including our local cities of Orange Beach, Gulf Shores, Foley, Elberta, Summerdale and Robertsdale. For a consultation please call (251) 215-9275 or request a consultation on the consult request page.