Alert - New Power of Attorney Act Passed, Effective January 1, 2012

As mentioned in the November/December edition of our E-Newsletter, the Alabama Uniform Power of Attorney Act (“Act”) was made effective on January 1, 2012. The Act applies only to Powers of Attorney (“POA”) signed on or after January 1, 2012, and it is important that any new POA that you sign conforms to the new Act.

The Act makes several changes, and the substantive changes are outlined below:

  • A POA is now presumed durable, unless it specifically states otherwise;
  • A POA now requires signature of principal or another individual directed by the principal and in his conscious presence, and a signature is presumed to be genuine if the principal acknowledges the signature before a notary public;
  • A photocopy or electronically transmitted copy has the same effect as the original, unless another law requires presentation of the original power;
  • Generally, meaning and effect of a power is to be determined by the law under which it was created;
  • A power of attorney is effective when executed, unless the power expressly indicates it is springing;
  • If a principal names coagents, each coagent may exercise its authority independently unless the POA says otherwise;
  • A successor agent has the same authority as that granted to the original agent;
  • If an agent that has accepted appointment and has actual knowledge of a breach or imminent breach by another agent fails to notify the principal or, if the principal is incapacitated, to take action to safeguard the principal’s best interest, that agent is liable for the reasonably foreseeable damages that could have been avoided had the agent provided the required notification;
  • Alabama exonerates a person from liability for effecting a transaction in reliance upon an acknowledged power of attorney unless the person has actual knowledge of certain facts as set forth in Code of Alabama § 119(c); and
  • Alabama makes a person who refuses to effect a transaction in reliance on a POA liable for attorneys’ fees unless that refusal is made in good faith. 

The Act also includes a statutory form, which sets forth the powers by referencing the applicable Alabama Code section and allows for individuals to initial next to the powers that are to be granted. While this statutory form will be available for our clients to use, we have created a form that is of a more traditional format and fully describes the powers to be granted in the body of the POA. Please consult with your legal counsel when executing a POA after January 1, 2012.

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