A Power of Attorney (POA) is a legal document that authorizes some-one to act on your behalf. If you become seriously ill or injured, you will probably need someone to take care of your needs and personal affairs. This can be done through a power of attorney.
You can assign a power of attorney to anyone you choose. You can give that person power to carry out only certain actions or transactions, or you may allow the person to act on your behalf in all matters, including your living will.
All POAs are not created equal. Each type gives your attorney-in-fact—the person who will be making decisions on your behalf—a different level of control.
General Power of Attorney
A general power of attorney gives broad powers to a person or organization (known as an agent or attorney-in-fact) to act on your behalf. These powers include handling financial and business transactions, buying life insurance, settling claims, operating business interests, making gifts, and employing professional help.
General power of attorney is an effective tool if you will be out of the country and need someone to handle certain matters, or when you are physically or mentally incapable of managing your affairs. A general power of attorney is often included in an estate to make sure someone can handle financial matters.
Special Power of Attorney
You can specify exactly what powers an agent may exercise by signing a special power of attorney. This is often used when one cannot handle certain affairs due to other commitments or health reasons.
Selling property (personal and real), managing real estate, collecting debts, and handling business transactions are some of the common matters specified in a special power of attorney document.
Health Care Power of Attorney
A health care power of attorney grants your agent authority to make medical decisions for you if you are unconscious, mentally incompetent, or otherwise unable to make decisions on your own.
Durable Power of Attorney
Suppose you become mentally incompetent due to illness or accident while you have a power of attorney in effect. Will the document remain valid? To safeguard against any problems, you can sign a durable power of attorney. This is simply a general, special, or health care POA that has a durability provision to keep the current power of attorney in effect.
You might also sign a durable power of attorney to prepare for the possibility that you may become mentally incompetent due to illness or injury. Specify in the power of attorney that it cannot go into effect until a doctor certifies you as mentally incompetent. You may name a specific doctor who you wish to determine your competency, or require that two licensed physicians agree on your mental state.
Duration of Granted Power
A general power of attorney remains in force unless expressly revoked or determined by the death of either of the party. A special power of attorney will be in force until the specified act is not completed. Duration of the power will depend upon the type of the attorney or there may be a fixed period of power granted by the principal which must be included in the deed.
Revocation of Power of Attorney
A power of attorney may be revoked at any time by the principal or donor by giving a written notice to the agent, unless it is for a particular fixed period. Revocation usually possible when principal dies or becomes insane or becomes bankrupt. The principal himself can revoke power of attorney if the business for which the agent was appointed is over as mutually agreed upon by the principal and agent. In case if principal has named a spouse or registered domestic partner as his agent, his or her authority to act under the power of attorney is automatically terminated in the event of divorce, legal separation or termination of the registered domestic partnership.
A Power of Attorney requires authentication as provided under Section 85 of the Indian Evidence Act, which reads as under:
“The Court shall presume that every document purporting to be a power of attorney and to have been executed before, and authenticated by a Notary Public, or any Court, Judge, Magistrate [Indian] Consul or Vice Consul, or representative of the Central Government, was so executed and authenticated.”
Authentication means establishing the authorship contemplated by the section, it does not merely mean attestation, it means that the person authenticating it has assured himself of the identity of the person who had signed the instrument as well as the fact of execution.
Registration outside India:
A power of Attorney executed outside India should be authenticated before any of the Indian Consulates in that country.
Important Clauses in a Power Of Attorney
While creating a Power of Attorney it is important to include certain mandatory clauses depending upon the type of power of Attorney that is made. Some of the essential clauses that needs to be included in the Power of Attorney deed are as follows:
- The name, age, address and occupation of the person who makes the Power of Attorney, the Principal.
- The person to whom the power is granted, the Attorney.
- The reason for granting the power of Attorney which should be legally valid.
- The date and place of making the Power of Attorney deed and the date from which it comes into force.
- The date of termination of the power of Attorney if it is limited by time. If no time is specified mention whether the Power of Attorney is durable or non-durable.
- If it is a general power granted then all the acts and areas of granting the power should be mentioned clearly. Whether any particular act is not to be done by the Attorney in certain areas should be specified. For e.g. If general power for property is granted, the Principal can grant the power to buy or rent any property but may not grant the power to sell any of his property.
- In Special power of Attorney the specific or particular act or task that needs to be done and completed by the Attorney is to be clearly mentioned. Also the time limit within which that act is to be done is also to be specified.