Power of Attorney
Power of Attorney
Q : Who can execute Power of Attorney?
Ans: A person who has attained majority may execute power of attorney in favour of another person who has attained majority including family members like brother, sister, father and mother to act on his behalf. If a power of attorney is executed to sell property in favour of relatives other than those mentioned above, one may be required to pay stamp duty on market value of such property.
Q : When would a General Power of Attorney gets cancelled?
Ans: a. GPA automatically gets cancelled on the death of Executant.
b. Principal (Executant) may cancel it any time.
Q: What does Irrevocable Power of Attorney mean?
Ans: If the Power of attorney is executed for consideration in respect of property it cannot be unilaterally revoked, prejudicial to the interest of the agent (See Sec.202 of Indian Contract Act, 1872).
Q: What is the meaning of a Special Power of Attorney?
Ans: (a) Power of Attorney executed by a person in favour of another to act on his behalf for specific purpose is called Special Power of Attorney.
(b) If a person is unable to go over to registry office to present a document executed in his favour or to admit execution of document executed (signed) by him, such power of attorney shall be authenticated or attested by a Sub Registrar. Otherwise they are not acceptable for the purpose of registration.
Q: Is it compulsory to register power of attorney attested in India by Magistrate or notary?
Ans: They need not be registered. But General Power of Attorney containing authority to present or admit execution of a document executed by the principle is not acceptable for such presentation or admission of execution unless they are attested or authenticated by a Sub Registrar.
Q: Is it compulsory to register General Power of Attorney executed by persons residing out of India and attested by officers of Consulate office of India in that country?
Ans: It is not necessary to register unless Stamp duty as per law shall be paid within 3 months from the date of receipt of the power of attorney in India.
Q: Is it compulsory to get a Power of Attorney attested by a Sub Registrar if it has already been attested by Magistrate or Notary, under which documents are signed by the agent?
Ans: Not necessary
Q. What is the meaning of Power of Attorney property?
A Power of Attorney is a legal instrument that is used to delegate legal authority to another. The person who signs a Power of Attorney is called the Principal. The Power of Attorney gives legal authority to another person (called an Agent or Attorney-in-Fact) to make property, financial and other legal decisions for the Principal. The word attorney here means anyone authorized to act on another personís behalf. It is not restricted to lawyers. A Principal can give an Agent broad legal authority, or very limited authority. The Power of Attorney is frequently used to help in the event of a Principal's illness or disability, or in legal transactions where the Principal cannot be present to sign necessary legal documents.
Q: Is it possible for an Agent to steal your money and property?
Ans. A Power of Attorney can be abused, and dishonest Agents have used Powers of Attorney to transfer the Principal's assets to themselves and others. That is why it is so important to appoint an Agent who is completely trustworthy, and to require the Agent to provide complete and periodic accountings to you or to a third party.
Q: What kinds of legal authority can be granted with a Power of Attorney?
Ans. A Power of Attorney can be used to grant any, or all, of the following legal powers to an Agent:
- Buy, sell, maintain, pay taxes on and mortgage real estate.
- Manage your property.
- Conduct your banking transactions.
- Invest, or not invest, your money in stocks, bonds and mutual funds.
- Make legal claims and conduct litigation.
- Attend to tax and retirement matters.
- Make gifts on your behalf.
- Use your assets to pay your everyday expenses and those of your family.
- Buy and sell insurance policies and annuities for you.
- Claim property you inherit or are otherwise entitled to.
- Collect benefits from Social Security, Medicare or other government programs or civil or military service.
- Operate your small business.
Q: Do you need to have your signatures witnessed on a Power of Attorney?
Ans. Yes. A Notary Public must witness your signature on the Power of Attorney. In some states, witnesses must watch you sign the document.
Q: Do I need a lawyer to prepare a Power of Attorney?
Ans. You're not required to hire a lawyer.
Q: How many copies of a Power of Attorney you should sign?
Ans. You are required to sign (execute) only one copy. However, it is not unusual for a Principal to sign several original copies. Some banks and brokerage companies have their own durable power of attorney forms. If you want your attorney-in-fact to have an easy time with these institutions, you may need to prepare two (or more) durable powers of attorney: your own form and forms provided by the institutions with which you do business.
Q: How do you select an Agent for a Power of Attorney?
- You should choose a trusted family member, a proven friend, or a professional with an outstanding reputation for honesty. Remember, signing a Power of Attorney that grants broad authority to an Agent is very much like signing a blank check.
- Certainly, you should never give a Power of Attorney to someone you do not trust fully. And do not allow anyone to force you into signing a Power of Attorney.
Q: Are there different types of powers of attorney?
Ans. Yes. There are "Nondurable," "Durable," and "Springing" Power of Attorney. A "Nondurable" Power of Attorney takes effect immediately. It remains in effect until the Principal revokes it, or until the Principal becomes mentally incompetent or dies. A "Nondurable" Power of Attorney is often used for a specific transaction, like the closing on the sale of residence, or the handling of the Principal's financial affairs while the Principal is traveling outside of the country.
A "Durable" Power of Attorney enables the Agent to act for the Principal even after the Principal is not mentally competent or physically able to make decisions. The "Durable" Power of Attorney may be used immediately, and is effective until it is revoked by the Principal, or until the Principal's death. If you don't specify that you want your power of attorney to be durable, it will automatically end if you later become incapacitated.
A "Springing" Power of Attorney becomes effective at a future time designated in advance by the Power of Attorney, such as the illness or disability of the Principal. You can specify that the durable power of attorney does not go into effect unless a doctor certifies that you have become incapacitated. A "Springing" Power of Attorney remains in effect until the Principal's death, or until revoked by a court.
Q: Can I appoint more than one Agent in a Power of Attorney?
Ans. Yes. You may appoint multiple Agents. If you appoint two or more Agents, you must decide whether they must act together in making decisions involving your affairs, or whether each can act separately.
Consider the advantages and disadvantages to both forms of appointment. Requiring your Agents to act jointly can safeguard the soundness of their decisions. On the other hand, requiring agreement can delay action, or one may be unavailable to sign. If your Agents are allowed to act separately, one will usually be available to act for you, but there may be confusion and disagreements if the Agents do not communicate with one another, or if one of them believes that the other is not acting in your best interests. It is generally a good idea to appoint a substitute Agent.
Powers of Attorney are only as good as the Agents who are appointed. Appointing a trustworthy person as an Agent is critical. Without a trustworthy Agent, a Power of Attorney becomes a dangerous legal instrument, and a threat to the Principal's best interests.
Q: Can a transfer of a Principal's assets to other people be a good thing?
Ans. Yes. A Principal may want to authorize transfers or gifts property for estate planning and other valid purposes. Powers of Attorney forms in many states permit Agents to make gifts to members of the Principal's family, if the Principal so authorizes in the Power of Attorney. The Principal can also customize a Power of Attorney to permit the Agent to make gifts to non-family members.
Q: Once you sign a Power of Attorney, whether you still continue to make legal and financial decisions for myself?
Ans. Yes. The Agent named in a Power of Attorney is only your representative. As long as you are capable to make decisions, you can instruct your Agent to do only those things that you want done.
Q: When is it appropriate to use a "Durable" or "Springing" Power of Attorney?
Ans. "Durable" and "Springing" Powers of Attorney are frequently used to plan for a Principal's future incapacity or disability and loss of competence resulting, for example, from Alzheimer's Disease or a catastrophic accident. By appointing an Agent under a "Durable" or "Springing" Power of Attorney, the Principal is setting up a procedure for the management of his or her financial affairs in the event of incompetence or disability.
A "Nondurable" Power of Attorney enables a Principal to decide in advance who will make important financial and business decisions in the future.
They are also helpful in avoiding the expense of having a court appoint a Guardian to handle the Principal's affairs in the event of incompetence or disability.
Q: What are an Agent's obligations to a Principal?
Ans. The Agent is obligated to act in the best interests of the Principal. An Agent is a fiduciary, with strict standards of honesty and loyalty to the Principal. An Agent must safeguard the Principal's property, and keep it separate from the Agent's personal property. Money should be kept in a separate bank account for the benefit of the Principal, and Agents must also keep accurate financial records of their activities, and provide complete and periodic accountings for all money and property coming into their possession. Instruct your Agent to provide accurate records of all transactions completed for you, and to give you periodic accountings. You can also direct your Agent to provide an accounting to a third party - a member of your family or trusted friend--in the event you are unable to review the accounting yourself.
Q. Do you required to file a Power of Attorney in a government office?
Ans. Not unless the Power of Attorney is used in a real estate transaction. In that case, it must be filed in the County Clerk's office. And when you file in the County Clerk's office, the Power of Attorney is a public record open to inspection by the public. A writing that revokes a filed Power of Attorney should also be filed in the County Clerk's office.
If you file a Power of Attorney in the County Clerk's office, you will be able to get additional "certified" copies from the County Clerk for a small fee. A certified copy is legally equivalent to the original document. It is often convenient to have certified copies of your Power of Attorney on hand.
Q: Who monitors the actions of my Agent?
Ans. There is no official or government monitoring of Agents acting pursuant to Power of Attorney. That is the responsibility of the Principal. It is therefore important to insist that your Agent keep accurate records of all transactions completed for you, and to provide you with periodic accountings. You might also direct your Agent to give an accounting to a third party in the event you are unable to review the accounting yourself.
- Should a Principal, member of the Principal's family or a friend have grounds to believe that an Agent is misusing a Power of Attorney, the suspected abuse should be reported to the police or other law enforcement authority to protect the Principal from the loss of his or her property. Consider asking a lawyer for help and advice.
- Please review our Lawyers Network to find the appropriate lawyer in your area.
Q: What can you do if your Agent does not follow my instructions?
Ans. You may revoke your Power of Attorney at any time, as long as you are mentally competent.
You should inform your Agent, in writing, that you are revoking the Power of Attorney. Request the return of all copies of your Power of Attorney.
You should notify your bank or other financial institution where your Agent has used the Power of Attorney that it has been revoked.
You should file a copy of the revocation with the County Clerk if your Power of Attorney has been filed in the Clerk's office.
If you decide to revoke a Power of Attorney, it is probably in your best interests to consult a lawyer, and arrange to have a new Power of Attorney executed.
Q: What is the process for creating a legal Durable Power of Attorney?
Ans: The process for creating a legal and valid Power of Attorney requires attention to detail but is not difficult, you can do it yourself. Here are the basic requirements:
- A Power of Attorney must be in writing.
- A person must sign it with the intent of creating a Power of Attorney.
- A Power of Attorney must be notarized.
Some states require witness signatures.
The following are NOT requirements:
- An attorney is not required for any part of the process.
- A Power of Attorney does not need to be printed on special paper.
The number of witnesses required varies from state to state. Most states do not require another witness other than the Notary Public. Your Power of Attorney will have the appropriate number of witness signature spaces for your state. To be competent as witnesses, the witnesses must be over the age of majority and must have the mental capacity to know that they are acting as witnesses to the Power of Attorney and would be competent to testify regarding the signing of the Power of Attorney.
After the Signing:
After the Durable Power of Attorney is signed, it should be placed in a safe place known to others. You may make photocopies available to select people.
Some states also require that the "Attorney-in-Fact" (the person assigned the powers) sign an Acceptance of Appointment document accepting the responsibility. This document will be provided to you and does not need to be signed at the same time the Durable Power of Attorney is signed. Person may have paid the entire consideration to the owner and holds on to the property for some time to sell it at a later date for a profit. The sale will be effected by the power of attorney holder on behalf of the owner. Such power of attorney must be properly stamped and registered. It should also not be revoked.