A Power of Attorney (POA) is a legal document that allows an individual (the "principal") to grant authority to another person (the "agent" or "attorney-in-fact") to make decisions on their behalf.

This guide will walk you through the process of creating a Power of Attorney in India, with special emphasis on the different types of POA, including durable and springing powers.

What Is A Power Of Attorney?

A Power of Attorney (POA) is a legal instrument that grants an agent the authority to make decisions and take actions on behalf of the principal.

It can be broad or specific, depending on the type and scope of the powers conferred.

Types of Power of Attorney:

1. General Power of Attorney (GPA): Grants broad authority over financial, legal, and business affairs.
2. Special Power of Attorney (SPA): Limits authority to specific tasks or transactions.
3. Medical Power of Attorney: Grants the agent authority over healthcare decisions.

Step-By-Step Guide To Granting A Power of Attorney In India

Step 1: Understand the Need for a Power of Attorney

Determine why you need a Power of Attorney and what type suits your situation. For example, if you're going abroad and need someone to manage your financial affairs, you might need a General Power of Attorney.

• If it's for specific actions like selling property, a Special Power of Attorney would be more appropriate.

Step 2: Choose the Right Agent

Selecting the right agent is critical. The agent should be someone you trust, such as a family member, a friend, or a professional, who is capable of managing your affairs responsibly.

• Attributes of a Good Agent: Trustworthiness, availability, financial responsibility, and willingness to take on the role.
• You can appoint more than one agent, and they may either act jointly or separately based on your instructions.

Step 3: Drafting the Power of Attorney Document

Once you've determined the type of POA and the agent, the next step is drafting the legal document. It can be drafted by a lawyer or using templates, ensuring that all essential details are included:

• Principal’s details: Full name, address, and identity proof.
• Agent’s details: Full name, address, and identity proof.
• Scope of authority: Clearly state whether the POA is broad (general) or specific (special).
• Duration: Specify how long the POA will remain valid.
• Conditions for revocation: Outline how and when the POA can be revoked.

Step 4: Including Special Provisions

Depending on the type of POA, you may include specific clauses:

• Mention that the authority continues even if the principal becomes incapacitated.
• Mention that the POA is only valid for certain activies such attending a shareholder's meeting but restricting the power to sell shares.

Step 5: Legal Formalities and Notarisation

In India, the POA document must be executed in front of two Witnesses and notarised by a notary public or registered at the Sub-Registrar’s Office for it to be legally valid.

Here’s how to proceed:

• Witnesses: The POA must be signed by two adult Witnesses who are present when the principal signs the document.
• Notarisation: Visit a local notary public to notarise the POA. The notary will authenticate the document by verifying the identities of the parties involved.
• Registration: For matters involving immovable property, the Power of Attorney must be registered with the Sub-Registrar's Office to make it legally enforceable.

Step 6: Registration Process

For registering the POA, follow these steps:

1. Visit the Sub-Registrar's Office: Along with the necessary documents (proof of identity, proof of address, and two passport-size photographs), the principal must appear in person.
2. Registration Fees: Pay the applicable stamp duty and registration charges, which vary depending on the state.
3. Document Submission: Submit the notarised Power of Attorney document for registration.

Step 7: Provide Copies to All Involved Parties

Once the POA is executed and registered, provide copies to all involved parties—your agent, financial institutions, medical facilities (for healthcare POA), and any relevant organisations. It’s also important to keep a copy for your own records.

Step 8: Revoking or Modifying the Power of Attorney

You can revoke the POA at any time, provided you are mentally competent. The revocation must be done in writing and communicated to the agent and any other party involved in the POA.

Additionally, you should register the revocation at the same office where the original POA was registered.

• Conditions for Revocation: A POA may be revoked if:
  • The principal regains the ability to handle their affairs.
  • The purpose of the POA has been fulfilled (eg, sale of property).
  • The principal decides to terminate it.

Types Of Powers Granted In A Power of Attorney

A POA can give the agent authority over various financial transactions, such as:

• Managing Bank Accounts: Paying bills, depositing funds, or closing accounts.
• Investing in Stocks/Bonds: Making investment decisions.
• Real Estate Transactions: Buying or selling property on the principal’s behalf.
• Tax Filings: Filing taxes and handling other financial obligations.

Benefits of Granting a Power of Attorney

1. Convenience: The principal doesn’t need to be physically present for important financial decisions.
2. Protection During Incapacity: A Power of Attorney ensures that a trusted individual manages affairs if the principal becomes mentally incapacitated.
3. Flexibility: POAs can be tailored to meet specific needs, granting broad or limited powers depending on the situation.

The Bottom Line: How Yellow Can Help

Granting a Power of Attorney is a significant legal step that can ensure your financial, healthcare, and legal matters are handled by someone you trust in times of need.

Whether it's a General Power of Attorney for managing a range of affairs or a Special Power of Attorney for safeguarding your future, it's crucial to understand the process, the powers involved, and the legal formalities required.

By carefully drafting and registering a POA in India, you can ensure that your affairs are managed efficiently, even in your absence.

Whether you're considering establishing a Power of Attorney or acting as an agent, it's crucial to approach this legal document with care and attention to detail.

Seek legal advice when necessary, communicate openly with the involved parties, and always prioritise the best interests of the principal.

By doing so, you can ensure that the Power of Attorney serves its intended purpose, providing the protection and support individuals need in times of need.

If you're looking to create a Power of Attorney, Yellow's team of legal experts can help you. Learn more here.