by akshayIntroduction to Power of Attorney: Provide a brief overview of what Power of Attorney (POA) is and its purpose
In a power of attorney, the principal chooses an agent to carry out and execute specific acts or deeds on his behalf. If the principal cannot act due to illness or disability, a power of attorney is used. The agent may act on the principal’s behalf if the principal cannot approve financial or legal transactions.
A power of attorney expires when its author dies, revokes it, or is declared invalid by a judge. A POA also expires when the creator divorces the spouse designated as the agent or when the agent can no longer perform the specified tasks.
What is the Purpose of a Power of Attorney?
An individual can appoint someone to act as his attorney-in-fact or agent by naming them in a power of attorney. This person has the same financial control over that person as if the agent or attorney-in-fact were the actual owners of the property. A durable power of attorney is valid from when it is signed and lasts until it is revoked or the maker dies. Each individual should seriously consider who they name as their agent or attorney-in-fact. A durable Power of Attorney is only the right legal document if such a person has complete faith and confidence in them as their Attorney-in-Fact.
A durable power of attorney can enable the Attorney-in-Fact to continue handling the maker’s financial obligations and company operations if the maker unexpectedly becomes unable or incompetent.
Types of Power of Attorney
There are various types of powers of attorney, such as:
1. Financial Power of Attorney
The financial power of attorney is a legal document that grants an agent the authority to take care of the principal’s financial affairs and their business, including completing tax returns signing checks, managing investment accounts, and mailing and depositing Social Security checks if the principal loses their capacity for comprehension or decision-making. To the best of their ability, the agent must carry out the principal’s wishes, at least to the extent specified in the agreement as the agent’s responsibilities. A financial POA offers the designated person extensive control over a person’s bank account, allowing them to sign cheques, make deposits and withdrawals, and create or modify beneficiary designations.
Financial POAs can be categorized into several different groups. Which are:
- General Power of Attorney
A general power of attorney gives an agent considerable authority to manage the business of a principal. The agent has many responsibilities. The duties include selling or purchasing real estate alongside establishing business contracts on behalf of the principal. - Durable Power of Attorney
The time when a person wants someone else to take the lead on their behalf is the validity of the durable power of attorney. A non-durable power of attorney invalidates upon revocation or quicker than the set expiration date. But what happens when the agent is incapacitated? In such a situation, the principal desires that the POA continue in effect even if they cannot speak. A durable POA is also used to specify, for example, that the spouse might act as an agent if the principal is comatose. - Limited Power of Attorney
A special or limited power of attorney is the best option for anyone wanting to limit the agent’s authority. The boundary of the agent’s authority is to be as detailed as possible before the special power of attorney is signed and notarized. It is necessary to consult a lawyer or legal advisor if someone still determines what the special power of attorney should cover.
2. Healthcare or Medical Authority of Attorney
The principal reserves the right to select the level of care they would like in case they become ill. In case of a terminal illness, a healthcare or medical POA lets the agent make decisions on behalf of the principal. Because they consider the possibility of the principal’s inability to make their own decisions as they are extremely unwell, most health POAs fall under the durable category.
Before selecting an agent in any of the abovementioned situations, the principal should consult with counsel. To fully comprehend what should be included in a power of attorney, it is also best for the principal to have the attorney guide them through each stage.
How Can You Get a Power of Attorney Done?
The POA must be signed within the authority’s territorial jurisdiction at the sub-registrar’s office. The POA must be invoked within three months of execution if the grantor lives overseas and should be attested by the Indian consulate there.
To execute a POA by an NRI currently living overseas and wanting to purchase real estate in India, a Power of Attorney can be created using a Legalization or Apostillisation procedure.
Conclusion
Power of Attorney is an essential legal tool that enables a person carry out vital legal proceedings without an active involvement. However, one must be extremely careful while choosing a POA.
