What is Power Of Attorney?
In financial, legal, or personal issues, a POA allows an individual to perform duties on behalf of another, known as the principal person. The scope of authority granted can vary from broad powers that cover all the principal’s business to limited power for a specific transaction.
If you’re interested to know more about a power of attorney, then you are on the right page. This blog will cover everything that you need to understand about a power of attorney, along with the steps to create a POA in India.
Understanding POA
POA is a legal document that grants an attorney-in-charge or legal agent the power to act on behalf of the principal person. The PoA is helpful when the person in charge is not available to handle their finances due to factors like physical or mental incapacity, etc. The powers of a POA are different based on their purpose. The agent can decide on medical treatment, financial matters, or property-related matters on behalf of the principal.
How Can A POA Help?
A PoA can be necessary in a variety of situations, as mentioned below:
Managing Financial Affairs
If you’re traveling abroad for an extended period or unable to manage your finances due to other commitments, a PoA can be a lifesaver. By appointing someone trustworthy, you can ensure your investments, bank accounts, loan repayments, and bill payments are managed responsibly. This arrangement not only safeguards your assets but also eliminates the stress of financial mismanagement in your absence. Additionally, your appointed representative can handle tax filings, insurance renewals, and other financial obligations, giving you peace of mind knowing everything is under control.
Health Care Decisions
Unexpected accidents or illnesses can leave you incapacitated, making it challenging to communicate your medical preferences. A PoA for healthcare allows a trusted person to make critical medical decisions on your behalf. They can consent to treatments, choose healthcare providers, and even make end-of-life care choices in line with their wishes. This ensures that your medical needs are met and your preferences are respected during difficult times. Having a healthcare PoA in place also reduces the burden on your loved ones, who might otherwise struggle with making tough decisions without guidance.
Real Estate Transactions
Real estate dealings often require timely actions, including signing agreements, registering properties, or managing leases. If you’re unable to handle these matters due to distance or other commitments, a PoA can step in. Your appointed representative can take care of selling, buying, renting, or maintaining properties on your behalf, ensuring that all transactions are completed efficiently. This is particularly useful for individuals with properties in multiple locations or NRIs with real estate investments in their home country. A PoA streamlines the process, saving you time and ensuring compliance with legal requirements.
Business Operations
For business owners, being physically present for every decision or transaction isn’t always possible. A PoA allows you to delegate authority to a trusted person who can sign contracts, approve budgets, and manage day-to-day operations in your absence. This ensures your business continues to run smoothly even when you’re traveling or dealing with personal emergencies. Whether you own a small enterprise or a large company, a PoA ensures that operations remain uninterrupted and decisions are made without delay, safeguarding your business interests.
For NRIs
Non-resident Indians often face challenges when it comes to managing assets and investments in India. A PoA can serve as a vital link, enabling a trusted representative to handle property maintenance, investment portfolios, bank accounts, and even legal matters. This arrangement is beneficial for overseeing property transactions, paying taxes, or dealing with government paperwork, which can be time-consuming for someone living abroad. With a PoA, NRIs can ensure that their affairs in India are managed efficiently and in their best interest, providing a practical solution for bridging the geographical gap.
Procedure To Create A POA In India
A PoA is a potent legal instrument, and you must be careful when creating one. Follow the below-mentioned steps:
- Select a reliable attorney to work for you, and the attorney may/may not be blood-related.
- Prepare a Power of Attorney document with the help of the best law firms in Bangalore, Delhi, Kolkata and Mumbai.
- Get the document notarized by a Notary Public. The notary must confirm the parties’ identities, affix their signatures, and seal the document.
- Get your PoA document attested by two witnesses.
- Get your POA document registered by the Sub-Registrar under the jurisdiction where the PoA grantor resides.
What are the Rights Of A POA Holder?
- Put in effect all deeds and bonds, mortgages, notes and contracts or drafts, cheques and money orders.
- Oversee real estate-related matters.
- Recover rent or exercise the right to bargain, sell the property, and take out a loan and mortgage it.
- Sell all or a specific share of bonds or stocks.
- Sign and file tax returns along with insurance policies and other similar documents.
- Execute or sign any agreement or contract.
- Make medical decisions regarding a donor or their minor children.
- Sue or take legal action on behalf of the principal person.
What are the Limitations of A POA Holder?
- Exceed the limits of the power conferred by the PoA document.
- Delegate the authority to take action on behalf of the principal to any other person
- Go against the best interest of the principal
- Making financial or legal decisions after the principal’s death
- Transfer assets and inheritances after the death of the principal
- Utilize the principal’s assets/money for own purposes
- Take decisions relating to the application of discretionary funds or tax planning
- Transfer the principal’s cash into their account
How Long Can You Hold A “Power Of Attorney?”
POA expires when the principal person dies, cancels the power, or when the court declares it invalid. It also expires when the person who created it divorces a spouse with a power of attorney or if the agent is unable to fulfil the outlined obligations.
Wrapping Up!
Understanding the intricacies of the Power of Attorney is not only a legal requirement but even practically important. It doesn’t matter if you’re an individual seeking to delegate responsibility or an NRI dealing with legal issues across borders; a well-drafted PoA could be your most reliable ally.
If you’re not sure about the complicated process of PoA, the best law firms in Bangalore, Delhi, Kolkata, and Mumbai have got you covered. From the draft to the registration process, legal professionals can make your task effortless.