Power of Attorney: Meaning, Types and Important Clauses

There are many circumstances in one’s life where a person having properties, bank accounts, etc. may not be in a situation or a position to perform his/her duties; due to various reasons like being abroad, ill, old etc. In such scenarios, if the transaction requires the presence of an individual who is unable to be present physically, then the only solution is to give their rights or powers to a person who can act on behalf of the individual. This is when a Power of Attorney (POA) is to be created. It is common to give the rights to a dependable person to bear the registrations, sale, rent out, etc. if you are busy with your daily activities.

The agent can have legal authority, or very limited authority to create legal decisions about the principal’s property, finances, medical aid, etc. An influence of an Attorney is an authority given in a written statement where one who is the donor or the principal authorises another person who is the Attorney/agent to act on his behalf.

The Indian Stamp Act defines it as “any instrument empowering any specified person to act for and in the name of the person executing it”. There is a specific act pertaining to the Power of Attorney, it is a very precise and brief one. The basic principles of these documents are governed by agency law in the Indian Contract Act.

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Types of Power of Attorney

1. General Power of Attorney (GPA)

A person can give another person a complete general right or power to act lawfully, with respect to his property or bank accounts, or tax payments, or a registration work to sue a third party etc. Either you can give a GPA for all your properties, banking transactions, tax matters, registration, legal disputes etc. or you can give general power to any category like only for property matters etc. This type of power is wide and has a lot of risks, if the Attorney is not trustworthy.

2. Special Power of Attorney

The other type of power granted is that of special power, which implies it is granted for less than a particular task. Once the actual act is completed the special power of Attorney is terminated. This can be generally employed in situations like if one wants to appear for the registration of any property etc.

3. Non-durable Power of Attorney

The non-durable power of attorney is utilised just for a target measure, and usually for specific transactions during which one grants the agent the authority to act on his/her behalf. Once the transaction is finalized, the non-durable power of attorney is over.

4. Durable Power of Attorney

A durable power of Attorney is way more encompassing than non-durable power of attorney, and is often accustomed to allow an agent to manage all the affairs of the principal, should they become unable to try and do so on their own. It doesn’t have a group fundamental measure and it becomes effective immediately upon the incapacitation of the principal. It does expire upon the principal’s death.

5. A Special or Limited Power of Attorney

A special or limited power of an attorney is employed on a limited basis for a one-time financial or banking transaction, or for the sale of selected property. This is often most frequently used when the principal is unable to complete the transaction owing to prior commitments or an illness and desires to appoint an agent to act on their behalf. The agent has no other rights to act on behalf of the principal apart from what is assigned to them within the limited power of Attorney.

6. Medical Power of Attorney

The medical power of Attorney grants authority to the agent to take certain control over healthcare decisions of the principal when they are unable to do so. This usually takes effect upon the consent of the presiding physician and it allows the agent to authorize all medical decisions.

7. A Springing Power of Attorney

Springing Power of Attorney becomes effective at a future time and only if a particular event occurs, like an unavoidable circumstance or triggering an event that happens while the principal is out of the country and unable to bear on it. This kind of Power of Attorney may have been durable or non-durable and may encompass any number of affairs the principal wants to allocate to the agent.

Important Clauses to be Present

• The name, age, address and occupation of the person appointing the facility of Attorney.
• The person to whom such power is granted to.
• The date and place of creating power of attorney deed, and also the start date which it comes into force.
• The date of termination of the facility of attorney deed if it’s limited by time. Just in case, if no specific time is mentioned, then mention whether those are durable or not.
• In the special power of Attorney, the statute that should be done by the agent and therefore the period of time within which such an act has got to be performed must be clearly mentioned.
• In cases where general power is granted, then all the acts that the principal authorises the attorney to try and do must be clearly mentioned. If the donor wishes a certain act to not be done, then such acts must even be mentioned.

Stamp Duty for the Ability of Attorney

As per Section 48, Schedule 1 of the Indian statute, tax is duly payable for all types of Power of Attorney. Notarizing the influence of an Attorney is advisable generally. An influence of an attorney who is notarised is presumed to possess and have been executed properly. Read more about stamp duty from here.

Power of Attorney Made by an NRI

An NRI or non-resident Indian can make an influence of Attorney deed even by staying outside India without having to come back to India for that purpose. Most NRIs have properties and banking transactions in India that may require their presence, but it’s often impractical to return to India for every such transaction. For this, NRIs can always give powers to transact to a different person who is either a friend or family. Any power of Attorney executed by NRI’s living abroad must be recorded. Such POA should be certified by the Indian Consular Office of that country, and it must be utilised within a span of 3 months. The POA must be executed on a stamp paper as applicable therein particular country. Any signature made within the POA must be authenticated by the authorities of the Indian embassy.

A power of Attorney looking at the clauses is also Revocable and Irrevocable.

Revocable Power of Attorney

The principal has the authority to withdraw the facility of Attorney whenever he/she wishes to. Revocation is applicable when

• When the principal revokes the facility of Attorney granted.
• If both the principal and also the agent are in disagreement with each other.
• If the power of Attorney renounces his powers
• If the business that the facility of Attorney was granted gets complete.

Irrevocable Power of Attorney

 For revocation of irrevocable power of attorney, the principal is required to issue a public notice through a local newspaper without which the revocation won’t be considered.

However, within the following cases a principal cannot revoke an influence of the Attorney:

• Where the ability of the Attorney holder, i.e. the agent himself has an interest within the material of the ability of Attorney. For revocation of the ability of Attorney falling under this category, consent of the ability of Attorney holder is mandatory.
• Where the agent has partly exercised the act that Power of Attorney was granted, he can’t be stripped with the proper for the act which he already exercised  

How to Prepare a POA Online

If you want to make a power of Attorney online, then you can do it easily sitting at your home and at a very minimal cost. Websites that provide this function need few details like where you live, identity information, etc. The process is simple, you need to fill in the form, make the payment online, print and register the document. No struggles in finding a lawyer, no waste of time and no worries of finding the correct clauses to include in the document and everything will be done and taken care of in a jiffy!

When it comes to legal issues and paperwork, you need to be extremely careful, even the slightest and silliest error could mean a huge loss. The best way to avoid such errors is to get a team of professionals to assist you. Selecting someone to control your power of Attorney and mentioning that it will operate even if you lose capacity ensures that you have a scheme in place for supervising your monetary and personal involvements if you are ever unable to do so.

This gives you more control over how that process will be handled if ever the need arises. If you move to another state or another country, your power of Attorney should remain effective; however, the American Bar Association recommends that you use such a move to update your power of Attorney.

A power of attorney is often a robust estate planning tool and might facilitate you to organize for the unexpected. Without an influence of attorney in situ, if you have been injured in an accident and are unable to speak, there’s no way for your loved ones to access the funds which will be necessary to supply for your care. Additionally, your loved ones could also be unable to communicate your wishes for your treatment unless you’ve taken the required steps to place a medical power of attorney in situ.

If you are an NRI and require a POA to deal with your property in India, it’s time to contact NoBroker. There are a host of services that are tailormade for you. Click the link below to know about NoBroker NRI services.

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