At the Law Offices of Brenton C. McWilliams, we often find that our clients have questions about powers of attorney (POAs). It’s a crucial part of estate planning, yet it can be confusing. Let’s break it down in simple terms.
A power of attorney is a legal document that allows you to appoint another person or entity, known as the attorney-in-fact or agent, to make decisions on your behalf. Think of it as choosing a trusted stand-in for yourself. There are two main types: financial and medical. Each serves a distinct purpose in your estate plan.
Financial Power of Attorney
A financial POA lets you choose someone to handle your money matters. This person, called your agent, can do things like pay your bills, manage your investments, or even sell your property. But you get to decide how much power they have.
There are a few different kinds of financial POAs:
- General Financial POA: This gives your agent broad authority over your finances. It’s comprehensive but requires a lot of trust.
- Limited Financial POA: With this, you can restrict your agent’s authority to specific tasks or accounts. It’s great for handling one-time transactions.
- Durable Financial POA: In Alabama, POAs automatically stay in effect even if you become incapacitated unless you state otherwise in the document. This continuity can be crucial for long-term planning.
- Springing Financial POA: This only kicks in when a specific event happens, like if you become incapacitated. While it offers control, it can be tricky to determine when it should “spring” into effect.
The right choice depends on your situation. For example, if you’re worried about future incapacity, a durable general financial POA might be best. But if you just need someone to handle a single real estate deal, a limited POA could do the job.
Healthcare Power of Attorney
In Alabama, we typically include the medical POA in what’s called an Advance Directive for Health Care. This document does two important things:
- It names someone to make medical decisions for you if you can’t.
- It can spell out your wishes for end-of-life care.
This POA is crucial because it ensures someone you trust can make healthcare decisions that align with your values when you’re unable to communicate.
Durable vs. Non-Durable Powers of Attorney
While Alabama assumes POAs are durable, you can create non-durable ones for specific purposes. Non-durable POAs end if you become incapacitated, making them suitable for short-term needs. But for most estate planning, durable POAs are usually better because they continue even if you lose capacity.
Choosing the Right Type of Power of Attorney for Your Needs
When selecting a power of attorney, you must consider your circumstances and the level of authority you want to grant your agent.
Factors to keep in mind include:
- The extent of your assets and financial obligations
- Your health and the likelihood of future incapacitation
- The trustworthiness and capabilities of your chosen agent
- Your long-term goals and wishes
An experienced estate planning attorney can better explain the types of POAs in Alabama and draft comprehensive documents that meet your needs and comply with state law.
Executing and Revoking a Power of Attorney in Alabama
You must be at least 18 years old and have the mental capacity to understand the nature and effect of the document to execute a valid power of attorney in Alabama.
There are also certain signing requirements depending on the authority granted in the document.
If your circumstances change or you no longer want your agent to have the granted authority, you can revoke your power of attorney at any time, as long as you have the mental capacity to do so. To rescind a POA in Alabama, you must:
- Create a written revocation document
- Notify your agent and any third parties who may have been relying on the POA
- Destroy all copies of the original POA
It is necessary to periodically review and update your power of attorney to ensure it aligns with your wishes and needs.
Protect Your Future with the Law Offices of Brenton C. McWilliams
Don’t leave your future to chance. At the Law Offices of Brenton C. McWilliams, we’re committed to helping you create a comprehensive estate plan that includes carefully crafted powers of attorney. Our experience with Alabama law allows us to tailor these documents to your life and goals.
Take the first step towards safeguarding your wishes and supporting your loved ones. Contact us today to schedule a conversation about your estate planning needs. Let’s work together to ensure your affairs are managed exactly as you intend, no matter what the future holds.
