Creating a Power of attorney is a legal process that involves the drafting of a document that assigns to another person the power to act as your legal representative. The power giver should be careful while authorizing anyone as an attorney to avoid the misuse of power and inconvenience and expense of any legal proceedings in the future.
Let’s discuss this in detail about how a power of attorney is made, and what are the important points one should take care of when drafting a power of attorney.
The “Power of attorney Act, 1882”, was passed on 24th Feb 1882. The Power of attorney Act is applicable in Complete India except for Jammu & Kashmir. The main motive of passing the act was to make it easy for the designated attorney to access the finances of the Owner and take care of the property.
There are two kinds of Power of Attorney:
- A General Power of Attorney (GPA)- A general power of attorney is one that allows the agent to make all personal and business decisions
- A Special Power of Attorney (SPA) – A special power of attorney is one that is limited to a specified act or type of act. This POA type confers limited powers & should be the first choice if circumstances allow.
|Read What is the Power of Attorney? to know more in detail about types of Power of Attorney!|
Contents of Power of Attorney:
Power of attorney provides the agent the power that the principal (owner) has to manage the principal’s financial affairs or make health care decisions may be enough for many purposes.
The power of attorney whether GPA or SPA is drafted to appoint an attorney on his behalf. The power of attorney consists of the following features-
- In the power of attorney, it should be clearly mentioned that who is the Executor & Attorney respectively. It should be verified with their addresses and Proof of ID.
- The powers that are being transferred to the attorney by the executor should be clearly mentioned.
- The Power Of Attorney should be verified and registered as per the law of India by the notary or it should be attested by the concerned authority.
How a Power of Attorney is made?
Step1: Draft the deed and register the power of attorney
Step 2: Identify the Parties that is the executor and the attorney
Step 3: Delegate the Powers that will be given to the attorney on behalf of the owner.
Step 4: Specify the Durability and type of Power of attorney to avoid the misuse of power in the future.
Step 5: Print on stamp paper and get the power of attorney notarized or Register at the sub registrar’s office
Step 6: or get it attested by a Notary.
Step 7: Record the power of attorney. It is not necessary to record all Power of attorneys but in some cases, it is advisable to do so.
Is the process of how a Power of Attorney is made now over?
Let’s discuss the process in details-
- In India, after the Registration Act, which came into existence in 1908, it was made composer that the Power of Attorney should be authenticated by a Sub Registrar only, (Whenever a person signs the document and his attorney presents/ admits execution).
- In other areas where the registrar is not in power or the power of attorney is drafted on plain paper then it should be authenticated by a Notary or diplomatic agents
- In case an attorney under a valid Power of Attorney himself signs a document, he may, as an executing (signing) party present/admit execution of a document though it is attested by a Notary unless the text of the power specifically excludes such powers
- In case when the parties involved in the deed are from Foreign then the Power of Attorney should be stamped by the Collector after its receipt in India within the prescribed time of 3 months
- The Power of Attorney shall be attested by two or more adult independent witnesses who are of sound mind
- If a power of attorney is in respect of immovable property of value more than Rs100 it must be registered.
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Now you must be thinking about what is this buzz about the authorization of Power of Attorney?
A Power of Attorney requires authentication as provided under Section 85 of the Indian Evidence Act, according to which authorization of the power of attorney is necessary.
As per the act, 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 necessarily mean attestation, it means the concerned authority has assured that the details are right.
Therefore a power of attorney can be got authenticated by and before the following authorities:
- Notary Public
- [Indian] Consul or Vice Consul
- Representative of the Central Government
Points to remember while drafting a Power of attorney:
- Ensure that as on the date of execution of any document based on the POA, the POA is in force and the principal(executor) is alive. Otherwise, the POA will be said void.
- The rights and obligations of the principal and the POA holder should be clearly laid out including decisions like leasing the property, hypothecating the property, selling the property, etc.
- If the POA is being executed abroad, ensure that it is either notarized or signed before Indian Consulate officials and then duly adjudicated within 120 days from the date of execution of the said POA.
- A power of attorney which is accurately authenticated by the notary or any magistrate, an affidavit has to be filed with all the original documents of the power of attorney authorizing an agent to do certain acts.
Quick Tip: A power of attorney is revocable at the will of the principal. However, while drafting the document of power of attorney, a clause can be added which specifically states that this power of attorney is not revocable at the will of the principal.
Read Can a power of attorney be canceled? to know more about how a POA can be canceled!
Making a power of attorney is a wise decision, as it ensures that someone will look after your financial affairs if you become incapacitated. But you should always make sure that the powers given by you are in safe hands. Signing a power of attorney is as risky as signing a blank cheque. You should choose wisely whose name you are putting on it.
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