Man is getting busier and it is becoming necessary for him to depend on others to carry out his actions and transactions. He needs to enter into contracts of agreements in relation to business. He can delegate his functions to others legally to carry out activities on his behalf. He can also do the same if he is physically unfit to take care of his business or property. He has to choose the person judiciously to whom he wants to delegate his functions.
TABLE OF CONTENT
- Know About Power of Attorney
- Credentials of an Attorney
- Authentication of Power of Attorney
- Life of the Power of Attorney
- Revocation of Power of Attorney
- Types of Power of Attorney
1.Know About Power of Attorney
A power of attorney is a legal document. It allows a person to act as the legal agent of another person and perform certain tasks on his behalf. The person who gives the power of attorney is called the donor or the principal and the one on whom the responsibility is shouldered is called the donee or the agent. Complete or limited authority will be given to the agent to take legal decisions about the principal’s property, finances or medical care. The legal process involves the drafting of a document which assigns the power to act as a legal representative of another person. The Principal should take all precautions in choosing an agent as attorney to avoid nuisance or any financial loss in future. He should choose a person who has the ability to keep financial records and should be trustworthy. One has to choose the agent judiciously.
An agent can take all necessary decisions related to legal issues where the principal cannot be present to sign or if he is ill or disable. A paper signed by the principal can also function as power of attorney if it gives powers to an agent but that paper should be clear and understandable. The power of attorney gets nullified if the principal dies or gets incapacitated. The power of attorney needs to be authenticated by a Sub-Registrar only or it must be notarized by the notary if the agent gets the power to sell a land. Registration of power of attorney is optional. It is not compulsory unless it creates an interest in any immovable property, i.e. if the power to sell a property is given to the agent. If the value of the immovable property is more than Rs.100 then the power of attorney needs to be registered. A stamp duty is compulsory which has to be paid in the jurisdictional registrar’s office.
2.Credentials of an Attorney
An agent or an attorney is the person who is appointed by the principal to act on his behalf. A power of attorney can be executed by any person who is proficient to enter into a contract. He must be willing to act in that capacity impartially. He has to be responsible and should act with utmost faith. He is supposed to be loyal to the donor and should never disclose any confidential matters related to the business of the principal. He should not be a miscreant and should not take advantage of his powers. He should be loyal and act in the best interest of the principal. He should understand his responsibilities and should not flow with emotions. He must use his powers judiciously.
3.Authentication of Power of Attorney
A power of attorney is a legal document and needs to be framed by using the right language. The objectives and the responsibilities which the agent has to carry out on behalf of the principal should be clearly mentioned in the document. This legal document needs authentication. Hence it should be signed and notarized by a certified notary advocate. He will declare that the principal is competent at the time of signing the document or the power of attorney. The principal will also have to prove his identity with the help of an ID to the notary advocate before he certifies and issues the document. This document has to be executed and authenticated by the Registrar or Sub-Registrar of assurances as per the Registration Act, 1908.
4.Life of the Power of Attorney
A general power of attorney remains active unless it is revoked or ends by the death of either of the party but a special power of attorney remains in force till the specified act does not get completed. Duration of the power of attorney depends on the type of attorney. There can also be a fixed period of power granted to the agent but it has to be mentioned in the deed by the principal.
5.Revocation of Power of Attorney
Revocation is the act of recall or annulment of the powers given to the agent by the principal. A power of attorney can be revoked by the principal at any time. In doing so, the principal has to give a written notice to the agent but revocation is not applicable if the power of attorney is for a fixed period of time. Normally a power of attorney gets revoked if the principal gets bankrupt or dies or becomes insane. The principal can revoke if the matter for which the agent was appointed gets over. This can happen by mutual understanding of the two. If the agent is a spouse of the principal, then the power of attorney revokes or gets terminated in case of divorce or legal separation. A Power of attorney is an important document and should be used judiciously.
6.Types of Power of Attorney
6.1. General Power of Attorney
As the name suggests, the general power of attorney is given by the principal to the attorney where he is authorized to do the general acts on behalf of the principal. In a general power of attorney the principal authorizes the agent to carry out all legal acts on his behalf without restricting it to a particular transaction. The agent has all the powers to act on behalf of the Principal until and unless specified or restricted for any action.
6.2. Special Power of Attorney
In this type, the principal authorizes the agent to act on his behalf only for a specified purpose and the power ceases once the purpose gets over. The specific purpose can be single or multiple.
6.3. Durable Power of Attorney
If it is a durable power of attorney or durability factor is specified in the deed, then the power of attorney will remain effective even if the principal becomes incapacitated. If the power of the agent has to continue even after the death of the principal, then surely it should be mentioned in the deed. Normally, the power of attorney is considered non-durable or ceases to exist with the death of the principal unless specified in the deed.
6.4. Medical Power of Attorney
In this type of deed, the principal authorizes the agent to make medical treatment decisions for the principal in case he gets incapacitated or if he will not be in a position to take some decisions related to his treatment. Power of attorney is a sensitive deed and should be used judiciously.
Written by Nikhil Gattu
