Power of Attorney is a legal document that allows a person to appoint any individual or an organization to manage its business and other affairs if and when he/she becomes unable to do so. The person who gives the authority is called the principal and the person who gets the authority is called the Agent or Attorney-in-fact. Power of Attorney has proven an easy and beneficial mean for NRI to settle their business and legal matters without having need to travel hence and forth in regular intervals. Power of Attorney remains into force only during the lifetime of the principal and ceases to exist on his/her death as the property then passes on to the heir.
Power of Attorney can be of different kinds, depending upon the extent of right ceded to the agent by the Principal. These are as follows:
- General Power of Attorney – The agent is accorded a broad scope of functions under the General power of Attorney. He/she is empowered to take decisions on the behalf of the principal about financial and business transactions, professional matters and as specified. A general power of attorney is applicable only when the principal has the full mental capacity to perform. It automatically ceases to exist when the principal becomes mentally incapacitated. The government of India has put numerous checks on the implementation and methodology of General Power of Attorney, to mitigate the cases of fraud and cheating.
- Special Power of Attorney – In Special Power of Attorney, the authority of the agent is restricted only to certain matters, as specified by the Principal in the contract. Once the matter has been sorted, the special power of attorney ceases to exist.
There are fewer chances of fraud and cheating in case of Special Power of Attorney as compared to General Power of Attorney.
A Power of Attorney is a powerful document that gives a third party access to take a decision on your behalf. Thus, it is necessary to choose an agent wisely. The Principal can choose anyone he trusts as his agent, be it a family member, a friend, a trusted employee or his lawyer. Further, it is important to have a trusted lawyer furnish the document of Power of Attorney to safeguard you against any mishappenings.
There are three important aspects that must be properly checked and mentioned before signing the document of Power of Attorney:
- Why is the power of attorney being given to the agent, that is to say, that the document must clearly mention the reason for which the Principal is appointing an agent to perform tasks on his/her behalf.
- What is agent being empowered with. It means that the extent of the power being transferred to the agent must be specified the document clearly to avoid any trouble in the future.
- How and when the rights of the agent will cease to exist. The document must mention the procedure explaining how and when the powers of the agent will be revoked.
NRI usually appoint Power of Attorney to perform different transactions on their behalf, like sale and purchase of land, settling of property dispute and such. It is advisable to draft the power of attorney under the guidance of an expert and trusted lawyer, so as to have a 360-degree check on the legal and safety aspect of the document. NRI Legal Services is an organization offering expert legal advice to NRI in particular. With a panel of leading lawyers, we make sure that you receive an appropriate legal advice in a timely manner.