A Power of Attorney (POA) is a legal document that allows an individual (the principal) to authorise another person (the agent or attorney-in-fact) to act on their behalf for financial and medical matters.

This authority can be broad or limited depending on the specific needs of the principal.

A POA document is commonly used for managing financial affairs, handling real estate transactions, making medical decisions, and carrying out other legal and financial tasks when the principal is unable to do so personally.

Types Of Power Of Attorney In India

1. General Power of Attorney (GPA)

A General Power of Attorney (GPA) grants broad powers to the agent, allowing them to handle financial transactions, bank accounts, legal affairs, and business decisions on the principal's behalf.

2. Special or Limited Power of Attorney

A Special or Limited Power of Attorney grants the agent authority for specific tasks, such as selling property, managing a single financial transaction, or filing tax returns.

The powers granted are clearly defined and restricted to the task assigned.

3. Durable Power of Attorney (DPOA)

A Durable Power of Attorney remains valid even if the principal becomes mentally incapacitated. This type of legal document is particularly useful for managing financial and medical matters when the principal can no longer make decisions.

4. Springing Power of Attorney

A Springing Power of Attorney becomes effective only upon the occurrence of a specific event, such as the principal becoming mentally incompetent.

5. Medical Power of Attorney (Medical POA)

A Medical POA allows the agent to make medical decisions on behalf of the principal if they are unable to make decisions themselves. This is especially important for issues related to life support and other healthcare power considerations.

Steps To Make A Power of Attorney Legally Valid In India

1. Drafting the POA Document

The attorney document must clearly outline:

• The principal's details (name, address, age, etc).
• The agent’s authority and powers granted.
• Whether it is a broad authority or a limited power.
• The duration of the POA (temporary or permanent).
• Any restrictions or conditions.

2. Stamp Duty and Notarisation

• In India, stamp duty payable varies by state. The POA document must be executed on non-judicial stamp paper.
• The document must be notarised by a trusted third party, such as a notary public or government office.
• If the POA involves immovable property, it must be registered with the local Sub-Registrar Office.

3. Signing the POA Document

The POA must be signed by:

• The principal, in the presence of two Witnesses.
• The agent, confirming acceptance of the powers granted.
• The notary public or government official to verify authenticity.

4. Registration Process

• If the POA is related to real estate transactions, it must be registered with the Sub-Registrar Office where the property is located.
• The principal must be physically present during registration unless a special power allows another individual to register on their behalf.

5. Granting Authority to More Than One Agent

A principal can appoint more than one agent who can either:

• Act jointly, requiring both agents to make decisions together.
• Act separately, allowing each agent to make independent decisions.

Legal Implications Of A Power of Attorney

1. Principal's Mental Competence

The principal must be mentally competent at the time of signing the attorney document. If the principal is later found to be mentally incapacitated, a Durable POA is required to maintain validity.

2. Revoking a Power of Attorney

A Power of Attorney can be revoked under these conditions:

• The principal issues a revocation notice.
• The agent misuses their authority.
• The principal's death occurs, which automatically terminates the POA.

3. Legal Protection and Disputes

If there are disputes regarding the agent's authority, a court may intervene to ensure the POA is being used in the principal's best interests.

Responsibilities of the Agent

• Managing bank accounts and conducting financial transactions on the principal's behalf.
• Handling legal affairs and business decisions.
• Making medical treatment decisions under a Medical POA.
• Acting in good faith and avoiding conflicts of interest.

Filing Tax Returns and Financial Matters

An agent under Financial POA is responsible for:

• Filing tax returns on behalf of the principal.
• Managing financial affairs such as paying bills and handling bank accounts.
• Ensuring compliance with income tax laws when handling the principal’s financial power.

The Bottom Line: How Yellow Can Help

A Power of Attorney is an essential legal document giving authority to an agent to manage the principal's affairs.

Ensuring proper legal requirements are met, including stamp duty, notarisation, and registration, is crucial to making the attorney document legally valid in India.

By understanding broad or limited authority, the legal status of a POA, and the agent's authority, individuals can effectively safeguard their financial and medical matters and protect their own affairs.

At Yellow, we take care of all your estate planning requirements, including making a Power of Attorney. Our team of estate planners have more than 50 years of experience and can help you through every step along the way.

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