What is a power of attorney for property?

A power of attorney (PoA) is a legal document that grants asset management authority to another. Understand and draft this document carefully if you want someone to manage your property and finances. In this blog we’ll learn about the types, format, and criteria for choosing a general Power of Attorney for property.

What is a power of attorney?

A power of Attorney (PoA) is a document that a person uses to appoint another person or organisation to handle his or her finances, medical expenses, or immovable assets. This appointed agent may act and make decisions when the person creating the POA is not present. The decisions of PoA are legally valid. The person authorizing another to act on his or her behalf is the principal or grantor, or donor. The person authorised to function in this way is called the agent.

What kinds of PoAs exist?

PoA may be categorized into a few types based on the amount of power exercised in them. They include:

Conventional / General Power of Attorney

Also called a General Power of Attorney (GPA), it is limited to a specific duration or purpose. The agent may make business or personal decisions for the grantor. Because the level of responsibility is restricted in this kind, it’s also called a limited power of attorney.

Durable Power of Attorney

It’s for the life of the grantor with the agent possessing the ability to decide even if the grantor is incapacitated. This PoA is in effect until revocation or death of the grantor.

Springing Power of Attorney

A springing power of attorney is not effective immediately. It works for any particular condition, date or event that is about to occur or will occur down the road if a grantor becomes incapacitated.

Limited Power of Attorney

A Limited Power of Attorney is exercised for a specified time and the agent acts on behalf of the principal. An example of this PoA type would be an NRI leaving the country for four years and appointing a Limited Power of Attorney during that time.

Medical Power of Attorney

It has durable and springing aspects. It is effective for making healthcare or medical decisions. It does not take effect unless the grantor is of sound body and mind and conscious. In this case, the PoA agent may perform acts such as pay the grantor a medical bill. However, he is not authorised enough to take off the grantor’s life support system if necessary.

How is an individual chosen for PoA selected?

  • The individual should be trustworthy and reliable
  • The minimum age required is 18
  • The individual must have a sound mind, values and character.
  • You may also have multiple PoAs that work together or independently in different spheres of operation.

How does a PoA become revoked?

It may be revoked if the grantor is mentally competent. To revoke the PoA, a person may inform the agent in writing of the revocation and sign prior to a notary public.

A PoA is an enormous responsibility. You ought to be cautious about whom you entrust it to. Nevertheless, those becoming attorneys should also perform their duties honestly and honestly.

Can a PoA holder sell the property to himself?

Because the Power of Attorney holder is also the proprietor of the property involved, he may legally sell the property to himself as well. But it cannot be transferred through PoA unless by a registered sale deed. This is per the latest Supreme Court judgement on power of attorney.

May one appoint more than one Power of Attorney?

Yes, a person may appoint more than one PoA. Additionally, one may decide whether these PoAs must act individually or jointly. Having multiple attorneys can be helpful because sound decision-making would be made after discussing all the advantages and obstacles. But it might also stall an important decision.

How will an NRI (Non-Residents Indians) execute a Power of Attorney?

As a Non-Resident Indian, executing a PoA in India would require supervision and assistance from the SRO. But first you must authenticate, sign and get the document notarised before you submit it to the consulate for attestation. In India two attorneys and two non-family witnesses bring this document before the SRO on a Rs 100 non-judicial stamp paper. For more in-depth guidance on PoA execution as an NRI, consult a lawyer.

Does Power of Attorney attract stamp duty?

Yes, there is a small stamp duty and situation-based registration charge depending on the Power of Attorney you select. For example, a GPA (General Power of Attorney) is executed against a Rs 500 stamp duty charge by close family relatives (husband, grandson, daughter etc). Any stamp duty expenses for Power of Attorney to anyone not in the close family circle will be charged at market value or circle rate.

A non – considered GPA will also attract a Rs 100 registration fee.

Is power of attorney legal after death?

In case the individual that granted it dies, the power of attorney is null and void and duties pass to the executor of their estate. The rights of the PoA holder extend only as defined in the guarantor’s will.