Alabama Power of Attorney Agent Duties: What You Can and Cannot Do

Being named as a power of attorney agent in Alabama is not a blank check. The UPOAA imposes specific fiduciary duties that the agent must follow in every transaction, and violating them can result in civil liability, criminal charges, and removal by the court.

Here is what Alabama law requires of an agent and what happens when those duties are breached.

Mandatory Duties (Cannot Be Waived)

Three duties apply to every Alabama POA agent regardless of what the document says — the principal cannot waive them:

1. Act in the principal's best interest and known expectations. If the principal expressed preferences while competent (keep the house, maintain specific accounts, support specific family members), follow them. If expectations are unknown, act solely in the principal's best interest.

2. Act in good faith. Honesty, transparency, and integrity in every transaction. No hiding transactions, no misleading the principal or their family.

3. Stay within the scope of granted authority. If the POA grants banking and real estate authority but not investment authority, the agent cannot trade stocks. If hot powers were not individually initialed, the agent cannot make gifts or change beneficiaries.

Default Fiduciary Duties

These duties apply automatically under Alabama law unless the POA document explicitly overrides them:

• Duty of loyalty — act solely for the principal's benefit, not your own
• Conflict of interest avoidance — do not enter transactions where your interests compete with the principal's
• Standard of care — act with the competence and diligence a reasonable agent would exercise
• Estate plan preservation — maintain the principal's existing will, trust, joint accounts, and beneficiary designations. Consider the principal's financial needs, tax implications, and eligibility for public benefits like Medicaid.

Recordkeeping Requirements

The agent must keep complete, accurate records of every financial transaction. This means:

• Date of each transaction
• Account and institution involved
• Description of what was done and why
• Amounts in and out
• Receipt or reference numbers

These records may be demanded by the principal (if competent), the principal's family, a co-agent, a court-appointed guardian, or a court. Failing to produce records when demanded creates a presumption that the agent was acting improperly.

How to Sign as Agent

When signing documents on behalf of the principal, the correct format is:

[Principal's Full Name], by [Agent's Full Name], as Attorney-in-Fact

This format makes clear that the agent is acting in a representative capacity, not personally. It matters for real estate deeds (county recorders require it), bank transactions (staff need to verify authority), and any legal document where the signature will be examined.

Never sign just the agent's name alone — that creates personal liability and may void the transaction.

Self-Dealing Limits

Under Section 26-1A-201(b), an agent who is not an ancestor, spouse, or descendant of the principal is strictly prohibited from:

• Creating an interest in the principal's property for themselves
• Transferring the principal's assets to themselves or anyone they are legally obligated to support
• Using the principal's funds for personal benefit

Even for family-member agents, self-dealing is permissible only if the POA explicitly authorizes it through the hot powers section (gifting, beneficiary changes). Without individual initialing of those powers, the transfer is unauthorized.

Compensation

Under Section 26-1A-112, an agent is entitled to reasonable compensation for their services and reimbursement for expenses incurred on the principal's behalf — unless the POA says otherwise. "Reasonable" is measured by what the work required and what a professional would charge for similar services.

The agent should document their time and expenses separately from the principal's financial records to avoid any appearance of self-dealing.

What Happens When Duties Are Breached

Civil liability. The principal, their family, or a co-agent can petition the court for an accounting, damages, and removal of the agent. The agent may be required to return misused funds plus interest.

Criminal charges. Misuse of a power of attorney involving an elderly or vulnerable adult triggers the Protecting Alabama's Elders Act. Financial exploitation of an elder is a felony in Alabama, carrying significant prison time and fines.

Reporting. Suspected abuse should be reported to the Alabama Department of Human Resources (DHR). If a bank or financial institution has actual knowledge or a good-faith belief that the principal is being exploited, the bank can refuse the agent's transactions and is protected from liability for doing so.

Agent Resignation

If the agent wants to step down, they must provide written notice under Section 26-1A-118. If the principal is competent, notify the principal directly. If the principal is incapacitated, notify the court-appointed guardian (if any), named successor agents, or the principal's primary caregiver.

The Alabama Power of Attorney Kit includes an agent duty reference card and transaction log template designed for Alabama's recordkeeping requirements.

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