power of attorney

What is the Power of Attorney?

Power of attorney in a layman’s language is a legal document which gives power to an agent who can be an attorney or any such other person appointed by the principle to work and take decisions on his behalf. 

Such a person can be any family member i.e. children, spouse, parents and can also be any other trusted person for example friend etc. 

When a person is given power of attorney he can take decisions as they are taken by principle itself and the principle will be liable for all acts of the agent done on his behalf. 

A person can make power of attorney due to a number of reasons such as not being able to manage different fields at same time constraints, health constraints or other reasons. 

He can make power of attorney for a number of things such as financial power of attorney, medical power of attorney, business power of attorney or others. 

Note: Power of attorney needs to be unambiguous and what all powers are given under must be clear as leading to no confusion.

“Power of attorney” as defined under Power of Attorney Act, 1882 includes any instrument empowering a specified person to act for and in the name of the person executing it.

This power of attorney can also be revoked at any time when the principal wants so and it can also cease to exist and give power to the agent or attorney after the death of the principal unless and until it is durable power of attorney. 

In case power of attorney is given to a spouse it comes to an end in case of divorce or judicial separation.

What is GPA & SPA?

Based on the objective behind making of power of attorney it can be of differentiated in two categories 

(i) general power of attorney (GPA) and 

(ii) special power of attorney (SPA)

What is the General Power of Attorney?

Under general power of attorney, no specified purpose or time period is mentioned in power of attorney and it provides a wide range of powers to the agent with respect to a number of fields such as medical, financial, business, daily decision making and such other powers as provided under it. 

As word general makes it clear all these decisions are to be general and not any specialized power is imparted to the agent. For example, in financial decisions he can take decisions in relation to banking work if the principal needs to open a savings account or current account and so on.

What is the Special Power of Attorney (SPA)?

In case of special power of attorney, there is specified purpose for which power of attorney is made such as in case of financial agents have full authority to make decisions with respect to investments, sale and purchase in relation to investments and such other decisions in relation to it. 

Similar is the situation in case of business or medical power of attorney. In special power of attorney, specific purposes can be performed in one single act or in a number of transactions.

What are the types of Power of Attorney?

There are also some other powers of attorney having different features and helps principle to achieve his various purposes by using these different types of power of attorney. Following are different types of attorney:-

Durable power of attorney

This power of attorney is the one which makes the agent eligible to work under it even after the death of principle or on principle being incapacitated to make decision and does not cease to exist on death of the principal or incapacity of principal.

Springing Durable power of attorney

This power of attorney is not a continuous one but it springs out on happening of any event or in need of any specific thing to be performed and it works as durable as such a situation can also happen or occur after the death of the principal.

Health care power of attorney

Under this power of attorney, an agent is given power to make all decisions with respect to health care of the principle in case of his being unable to make such decisions and he being unconscious, mentally incapable or otherwise unable to make decisions.

What is Limited power of attorney?

In limited power of attorney, an agent has specific power with respect to a particular task to do. Such as if an agent is given power of attorney for sale of a particular property or to make a particular investment.

How does the Power of Attorney Works?

Power of attorney is very simple and easy to make as one can simply write it down on any plain paper and get it notary attested or can write it down on stamped paper and then get it registered.

One can also download forms as per residence state and other requirements for his power of attorney. 

There is certain basic information that is required on it such as name, age, address, occupation of the principle, name of the person to whom granted, reason for granting, date and address of place where made and date on which it comes into force.

Agent or holder of power of attorney can be any person. There are no such qualifications mentioned anywhere for him but he must be of sound mind and must be a major i.e. 18 years of age or above.

Points to remember while making a Power of Attorney

  • There is no mandatory provision regarding registration of power of attorney in India but under certain specific regulations there arises a need for its registration. For example, under Transfer of Property Act, 1882 one needs to register any deed with respect to immovable property of value above 100 rupees.
  • Language of deed must be simple, clear and unambiguous.
  • Indian Stamp’s Act has made power of attorney chargeable under Section 48 of Schedule 1 and one needs to pay it in the jurisdictional registrar office. There is different stamp duty for different states based on different powers of attorney.
  • There is presumption regarding power of attorney under Section 85 of Indian Evidence Act, 1872 of it being authentic and registered before concerned authority and in case of any doubt proof of registration can be called for verification.

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