Drafting Power of Attorney

1. What is Power of Attorney?

A power of attorney is a contract in which one or more people authorise another person to act on their behalf. It’s a document used to appoint a representative. The document gives the agent the authority to make a restricted or broad range of decisions. The term “power of attorney” can also apply to the person who has been appointed to operate on your behalf. The agent can make legal decisions with either broad or limited authority. Based on the terms of the POA, decisions affecting the principal’s property, healthcare, or finances, may be made.

2. Types of Power of Attorney

There are four different kinds of power of attorney, each with its function, such as:

General Power of Attorney:

The general power of attorney is a comprehensive power that grants an agent extensive authority over a principal’s affairs. The person assigned to act on behalf of the owner is responsible for several responsibilities. Buying and selling real estate and entering into legal agreements on behalf of the principal are among the responsibilities. The agent can do nearly anything, including open financial accounts and manage personal finances. When the primary person becomes disabled, a general power of attorney arrangement expires.

Durable Power of Attorney:

The durable power of attorney is only valid for the time period in which the person wishes to have someone else act on their behalf. A non-durable POA will be cancelled or will expire when the designated expiration date approaches. The POA will continue to apply if the agent becomes incapacitated. Even if the POA cannot engage or communicate, the principal prefers that the POA remain active.

Special or Limited Power of Attorney:

If you want to limit what the agent can do, a limited or special power of attorney is the way to go. For example, the agent may have certain powers that are restricted to a specific location. A power of attorney, for example, gives the agent the authority to sell a property or a part of real estate. Before notarising a limited POA, a person should be as specific as possible regarding the agent’s responsibilities. If a person is unsure about what should be covered by a special power of attorney, they should seek legal advice.

Healthcare Power of Attorney:

The medical power of attorney empowers the agent to exercise precise control over medical decisions. If the principal becomes seriously ill, they retain the right to choose the provided level of care. In the event of a life-threatening sickness, the medical POA allows the agent to make decisions. To comprehend what will go into the contract, the principal must have counsel assist him through each stage of notarising a power of attorney.

3. How does Power of Attorney works?

A power of attorney is an extremely powerful instrument that, in most cases, takes effect immediately after it is signed. 

A power of attorney (POA) for someone over 18 may be required in certain instances. For example, before moving overseas, someone might hire a POA in the military so that if they get disabled, someone else can act on their behalf. However, disability isn’t the only cause one would want a POA. While working abroad, immigrants and their families must establish a POA to handle their business in America. People who travel extensively will need a POA so that someone can take care of their affairs while they’re gone. 

When an elderly face a serious, long-term health problem, POA’s are most typically established. Trustworthiness, sincerity, reliability & availability are the most vital characteristics. A spouse, kid, or other close relative is frequently named as the attorney-in-fact. Your agent may be relied upon to make financial decisions if your POA is unable to act.

Other key responsibilities that a POA can authorise someone to do are the following: Making real estate decisions, dealing with retirement benefits, and billing for healthcare.

4. Choosing a Power of Attorney

It can be difficult and unpleasant to choose a power of attorney. However, choosing the correct POA might provide you with a lot of peace of mind. Things to consider before choosing a power of attorney to handle your affairs. Therefore, a POA must be:

• Trustworthy: When choosing your POA, the first thing to evaluate is the person’s character and ideals. You’re allowing this individual to act on your behalf, so you need to trust that they are looking out for your best interests. Consider whether or not this individual can be trusted with such a significant duty as a power of attorney. They will, after all, be making decisions that will influence your life.
• Assertive:  It’s not always easy to be a power of attorney. Think about how they communicate. Do they come across as assertive or passive? When it comes to making difficult decisions, you’ll want to discover someone who won’t back down. The POA you choose should be capable of communicating effectively and confidently without hesitating or second-guessing themselves.
• Qualified: Because he will be making several decisions on your behalf, your power of attorney must be intellectually capable. Here are some things to consider:

1. Financial management and investment expertise, make sure your power of attorney is financially literate enough to handle your financial demands.
2. The nature and complexity of an individual’s assets.

5. Power of attorney overview

A  POA is a legally binding document that individuals prepare and sign. It authorises another individual to make decisions and act on their behalf. It can be useful for the elderly and those who want to appoint a trustworthy person to act on their behalf when they cannot do so themselves. 

Obtaining a POA is a private and generally inexpensive option to select a substitute decision-maker with the assistance of a lawyer. If you don’t obtain a POA in advance, a family member must appoint a guardian, and this procedure might be time-consuming and difficult.

If the principal is incapable due to illness or injury, a power of attorney is used. When the person assigned the POA dies or revokes it, a power of attorney dissolves or if the POA is declared invalid by a court of law.

6. Power of attorney documents

The following are the documents required for a power of attorney:

1. Aadhar card
2. Address proof
3. Passport
4. Voter ID

7. Power of attorney for sale of property

A power of attorney for property is a document that allows one person to sell property on behalf of another. The rights are usually centred on the sale deed and its registration. The document expressly limits all of the individual’s rights. As a result, the document must be carefully written.

Details included in Power of attorney for sale of property:

• A brief acknowledgement of ownership is included in a power of attorney document
• A description of the property, as well as a statement of intent to sell it, are required

• The purpose of implementing a power of attorney will be stated explicitly

Following that is a full description of the tasks that the attorney must complete.

• Sale, execution of the Deed of Sale, negotiation, and all essential forms and papers for the sale of the property.
• Statement of the property’s valuation before the Sub-Registrar to register the sale deed.
• If needed by law, completion of any further documents related to the Deed of Sale.
• Accounts of the amounts payable & receivable on the property are prepared, and such revenues are adjusted.

8. Special power of attorney

A special POA is a document that permits a person to act on behalf of the other, called an agent. A special power of attorney authorises someone to make legal or financial choices on their behalf. For example, Special power of attorney gives the agent the authority to sell a property or a part of real estate. Before notarising a limited POA, a person should be as specific as possible regarding the agent’s responsibilities. If a person is unsure about what should be covered by a special power of attorney, they should seek legal advice.

9. Irrevocable power of attorney

An irrevocable power of attorney empowers an agent to make decisions and enter into contracts on their behalf. Except in exceptional circumstances, an irrevocable power of attorney cannot be reversed or revoked. Irrevocable POA is unusual, rare. An irrevocable power of attorney cannot be revoked by either the principal or the agent. However, the document can be revoked in certain situations if the principle can show that the agent is not working in their best interests. A principal can use irrevocable powers of attorney in many business transactions, but this is uncommon.

 You should check your state’s rules before establishing an irrevocable power of attorney. The irrevocable power of attorney terminates if the principal becomes bankrupt, incapable, or deceased.

Likewise, unless the principal specifies otherwise in the agreement, a power of attorney terminates when the agent expires, becomes disabled, or files bankruptcy.

10. Valid power of attorney

You can indicate an expiration date on a power of attorney. For instance, if you require someone to conduct a real estate closing while you are away, based on that, you may design a limited POA; that way, a power of attorney will expire after the job is completed. 

You can also set an end date that is close to the closure date. It is unusual for people to set an expiration date when creating POAs for estate planning purposes. If a power of attorney does not have an expiration date, it is effective until death.

11. Registering power of attorney

Authentication is required for a Power of Attorney per Section 85 of the Indian Evidence Act. The Office of the Public Guardian must be notified of the existence of a lasting POA. The donor or the attorneys can register it. Authentication refers to proving ownership as defined by the section. It isn’t just about testifying. It signifies that the person certifying it is confident in both the person’s identity that signed the document and the fact that it was executed.

As a result, the following authorities can certify a power of attorney:

• Public notary
• Magistrate
• Court
• Judge
• Vice Consul
• Central Government Representative

Here’s how to register a lasting power of attorney:

• A documentation lawyer in India writes a power of attorney, both general & special
• Submitting the Power of Attorney to the Sub-Registrar.
• Submitting the supporting paperwork with the power of attorney.
• Before the Registrar, attestation of the POA is required.
• Two witnesses must certify the POA.

The following documents are required for the registration of a Power of Attorney:

• Aadhaar Card, Driving License, Voter ID Card, and other forms of identification are acceptable.
• Address Proof of Parties.
• Photo of the Parties in Passport Size
• Electricity Bill or Index II or Property Tax Receipt

If you are currently in India and intend to depart shortly, you need to do the following for a POA:

• On Rs 100 stamp paper, jot down the terms of the POA.
• Go to the registrar’s office in your locality. Different offices may be located in different areas of your city.
• The Office would require 2 witnesses of the Register to sign the POA.
• Carry originals and photocopies of self-attested documentation proof such as Aadhaar card, address proof, passwords, and voter ID cards.
• The registrar will take images of you, the POA holder, and the witnesses and keep them in the government records.
• The registrar will preserve a copy of the POA in his office registry and present you with a copy.

12. Power of attorney for land

POA is one of the most commonly used documents in real estate transactions since it’s a delegation document. An owner of a land might transfer their rights to another to execute in this way. The right to sell property is generally delegated by the real estate owner to his lawyers, estate managers, agents. Any agent who sells or transfers property without specific instructions to do so is breaking the law. Land sales made with an unlawful power of attorney will be void.

Regardless of whether there is a Deed of Transfer, Sales, a buyer must authenticate a power of attorney. This is to prove that the original owner has given the dealer selling permission to sell. Power of Attorney of Land must be verified before a purchaser proceeds with the paperwork, financing, and other steps involved in a land sale.

13. General power of attorney for all purposes

The following are the general powers of attorney for all purposes:

• POA can be used to create contacts
• All deeds, mortgages, bonds, cheques, contracts, notes, drafts, and money orders can be executed.
• POA has the ability to make deposits and withdrawals.
• To create, execute, & deliver any assignment of stock, bonds, or other investments.
• A POA can carry out any contract agreement.
• Selling, collecting rentals, exchanging, granting, leasing, bargaining, or borrowing
• To handle, settle, resolve, and rectify all real estate-related issues.
• To make deposits or withdrawals from any of the bank accounts, money market accounts, so on.
• Any  cheques, drafts must be prepared, executed, endorsed, accepted, and delivered by the POA.
• As needed, execute or issue trust deeds or other security arrangements.
• To act as a representative in all matters relating to those as mentioned earlier.
• Purchase, renew, redeem certificates of deposit, loan, savings, accounts in banks.
• The tax returns, insurance paperwork, and other documentation must be filed and signed.

14. Notarized power of attorney

To verify the identity of the individual signing a power of attorney form, it must be notarised. When it comes to executing a POA, notaries are essential. When notarising a POA, the notary role revolves around the affirmation attached to the Power of Attorney. The notary must certify that the principal appears before the notary voluntarily, that the POA’s conditions are meant that the principal’s signature is on the document.

To be legally valid, a POA document must be signed in front of a licenced notary public. The notary is a state government representative.

What Kinds of Powers of Attorney Do do You Need Notarized?

These forms of POA listed below must be notarised to ensure the signer’s identity.

1. General Power of Attorney
2. Special   Power of Attorney
3. Durable Power of Attorney
4. Medical Power of Attorney

In each of these cases, you should contact your lawyer before appointing an agent to represent you. The standards for notarising a power of attorney differ by state, so it’s always a good idea to double-check your state’s rules before putting your POA in place.

15. Power of attorney for selling property

A power of attorney is a versatile tool that allows one person to act on another’s behalf temporarily or permanently. The power to sell property is not included in every power of attorney contract. 

So, first and foremost, double-check that your POA contract includes real estate deals. Then, team up with a real estate agent who has handled POA real estate deals before. Next, you and your agent will have to coordinate with the title firm and the mortgage holder to verify that the power of attorney is executed. Your transaction will proceed generally once you’ve completed these steps.

16. NRI power of attorney

An NRI (non-resident Indian) can create a POA contract even if they are not in India. The majority of NRIs hold houses and bank accounts in India, which may necessitate their presence during transactions. Non-Resident Indians (NRIs) frequently look to India’s real estate market to develop a significant asset that will bring good returns in the future. A dependable and trustworthy Power of Attorney might help you get through your problems.

The key distinction between an NRI Power of Attorney and a regular Power of Attorney is how it is legalised in the NRI’s home country. If the NRI lives in the United States, the POA must be legalised by  Indian High Commission. The method for NRIs to follow while preparing a POA deed is as follows:

1. Draft the Power of Attorney
2. Take it to the Indian Embassy and have it stamped & sealed.
3. The legalisation process will be largely determined by the legislation of the jurisdiction in which the POA will be employed.
4. By registered mail, send the attested deed to your Indian attorney.
5. It should be registered in India by the attorney.

17. Special power of attorney real estate

A real estate special POA is a document that allows an individual to sell a property on behalf of another individual who is the principal. The tasks the attorney can perform are,

• Prepare the deed of sale & negotiate the price.
• Declare the property’s value.
• Accept the payment from the buyer and give him a receipt.
• Transfer ownership of the property to the buyer in a vacant, unencumbered state.
• Ensure that the buyer takes possession of the property when the sale is completed.
• In the event of a legal disagreement over the property, appear in a court of law.

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• Special Power Of Attorney for Property
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Frequently Asked Questions (FAQ’s)