A power of attorney (PoA) is a legal agreement that permits one person to take action on behalf of another individual. Power of Attorney (PoA) is subject to the Powers of Attorney Act 1888. In general, the registration of the power of Attorney (PoA) isn’t required. However, registration is mandatory if the PoA creates an interest in the concerned property.
In simple terms, power of attorney is the transfer of authority to someone else to do a specific job like selling a house, representation in the court, negotiating with potential buyers, etc.
What is a power of Attorney?
A power of attorney (POA) is a crucial legal document that permits the holder to designate another person or an organization to manage their assets (Power of attorney to manage the property) as well as medical affairs and financial matters on his behalf when he is not there.
The person who authorizes another person to perform the duties on his behalf is known as the principal, donor, or grantor. The person who is authorized to act on behalf of the principal is called the agent or the power of attorney agent.
Based on the terms and conditions, the authorized agent can be granted extensive power or limited authority to take legal decisions regarding the property (Power of attorney for the property) as well as medical and financial matters.
Different types of (POA)
Four kinds of POAs are based on the degree of delegated responsibility.
1. Conventional POA
In accordance with the extent of responsibility given to the person signing it, this document is called the General Power of Attorney (GPA) or limited power of attorney. This is only limited to a certain duty and lasts for a set period. The PoA agent is able to make business and personal decisions under this facility.
E.g., The grantor may confer the authority to a PoA agent to sign a sale deed if they are out of the country or town.
2. Durable POA
A durable POA is intended to last for an entire lifetime. In this case, the PoA agent is able to make decisions even if the grantor becomes incapacitated/unfit to make decisions. In general, a durable POA is valid until the grantor’s death or unless the grantor chooses to terminate the POA.
E.g., The grantor could appoint an agent to oversee his portfolio of investments.
3. Springing POA
In the case of a particular condition, date, or event, a springing POA is used and also when the grantor becomes incapacitated.
For instance, if a soldier is disabled or has been deployed overseas, they could appoint a PoA agent to manage financial affairs.
4. A Medical POA
Medical POA comes under both the springing POA as well as a durable POA. The instrument is typically used to make healthcare-related decisions. It should be noted that medical POA is not activated until the person who grants it is aware and in good health, body, and mind.
E.g., In this case, the PoA agent may pay for the medical bills of the grantor. However, if the need arises, he’s not allowed to make a final decision regarding taking off the life-support system.
Who can be appointed as the (PoA)?
Choosing the right person to serve as a Power of Attorney (PoA) isn’t easy. When we consider the eligibility criteria, only a trustworthy person over 18 years old with a clear mind may be considered a POA.
Before deciding on a person to be POA, it is crucial to consider the character and value system of the individual. The person selected as a POA must be able to make decisions with clarity and conviction.
Can I appoint Multiple POA?
A lot of times, this question arises, can an individual select multiple PoAs? Yes, a person may choose to have multiple attorneys. They can decide if they should be acting separately or together when making a decision.
Multiple lawyers can assist in making an informed decision by discussing all the benefits and disadvantages. However, in certain situations, there may be disagreement between attorneys over a subject that could delay a critical decision.
It is wise having a second plan rather than relying solely on one PoA agent. If the agent becomes unwell or is injured, the backup agent can take over the job.
How do I cancel a Power of Attorney?
A power of attorney (PoA) can be terminated or canceled at any time as long as the individual who grants the PoA is mentally healthy and competent. If the person who granted the power wishes to end a PoA, the grantor must notify the agent in writing.
The grantor must then sign the revocation letter before a notary public and hand it over to the attorney-in-fact. The letter needs to be sent to all the third parties the agent is in contact with. If a power of attorney was granted in the recorder’s office, the revocation letter must be signed using the same basis.
How to become a (PoA) Agent?
In order to be a power of attorney agent, the person must be in good health and at least 18 years old. The agent is responsible for monitoring the financial transactions of all parties, should not combine their private property or bank account details with the grantor’s details, and should not involve in any conflict of interest.
What is the best way to choose the right (POA)?
Based on the conditions stipulated in the POA document, the authorized PoA agent could be granted limited or full power to make legal or other decisions regarding the property and financial or medical affairs. In addition, to be a PoA agent, you must be in good mental health and should be at least 18 years old.
The following suggestions could help you choose the right PoA:
- Choose a trusted person to manage your property and financial affairs in your absence. You may also choose an agent based on duties. You may also choose the kind of POA in relation to the duties to be performed.
- Many POA templates are accessible on the internet. Make sure you follow the guidelines in accordance with the rules and procedures of your state government.
- With the help of a general or property lawyer, you can make the POA.
- Fill out the required forms and sign all the documents related to the property.
- Review the signed forms by an attorney (property lawyer in case of property) and then get these documents notarized (Power of attorney for the property)
Stamp duty for Power of attorney
If a General Power of Attorney (GPA) is signed in the name of the mother, father, sister, brother, grandchild, spouse, brother, sister, son, daughter, or any close family member, without any consideration, the stamp duty will be Rs. 500/- is only applicable for registration.
If the beneficiary of the General Power of Attorney (GPA) is an individual other than a close family member in exchange for consideration, then stamp duty will be charged according to the property’s market value or the consideration value.
In addition to stamp costs, a registration fee of Rs 100 will be charged if the Power of Attorney (PoA) is granted with no consideration in the name of the father, mother, son, daughter, brother, sister, grandchild, spouse, husband, or any close relative.