Things to remember while giving a Power of Attorney to someone

What is the Power of Attorney?

The Power of Attorney gives an individual of your choosing the right to act on your behalf. The person who grants the power is the Donor, and the person to whom the power is granted is called the done. A Power of Attorney allows the donee to take clearly defined actions and decisions on behalf of the donor. However, the donor should be aware that  there are some precautions you need to take while signing the power of attorney agreement and ensure that your interests are fully protected. 

Some Points to Keep in Mind when Giving Power of Attorney

1.     Learn the difference between a Power of Attorney and a Letter of Authority first. While the Letter of Authority works well for simple tasks, a Power of Attorney is always preferable for more complex ones involving larger sums of money or asset values because its rights and responsibilities are easier to enforce. You must clearly understand the distinctions between terms because using the wrong formats could cause issues in the future. Depending on the specific purpose of your agreement, lawyers and advocates typically know what documents and agreements should be made.

2.     Check to see that the Power of Attorney has been properly registered, and that the state's stamp duty has been paid for. The lawful jurisdiction ought to be where the power of attorney is executed and the stamp duty is paid. An unregistered power of attorney cannot be enforced in court.

3.     Signatures and photographs of the donor and donee should be supplemented. This can be a useful source of evidence if the transactions are disputed in the future, or if the power of attorney goes to legal recourse.

4.     If the power of attorney concerns property, the donee should first verify that the donor has a valid title to the property and that their name appears as the owner in government revenue records. Additionally, the donee must ensure that the no-encumbrance certificate has been obtained before accepting the power of attorney.

5.     The donor and the donee's rights and responsibilities, including decisions like leasing a property, hypothecating the property, and selling the property, should be clearly outlined in the power of attorney for property matters. Check to see if the power agent has the authority to sign loan documents and can create an equitable mortgage in favour of banks/financial institutions on behalf of the donor before applying for loans based on a power of attorney.

6.     Check to see that the power of attorney is still in effect and that the donor is still alive on the date that any document based on the power of attorney is signed. Otherwise, the power of attorney is null and void from the start, rendering it meaningless. At the time of its registration with the relevant authorities, pre- or post-dated powers of attorney typically are not accepted.

7.     If the POA is being signed in another country, make sure that it is either notarized or signed in front of officials from the Indian Consulate. The document must then be properly ruled on within 120 days since the power of attotrney was signed. This is important because NRIs typically need to grant permission to operate their local trading and bank accounts.

8.     Make it a priority to check the availability of the original, properly registered power of attorney. You must be certain that the rights are unambiguous and unrestricted. In relation to power of attorney for Property Matters, you also check to see if the property's description—the schedule of property—is correct.

 A lot of people aren't quite aware of how crucial a power of attorney can be. It is an extremely important and useful legal tool. It can grant someone else, even if they are close to the donor, the full legal right to act on the donor's behalf when it comes to financial, medical, and other matters. Drafting your power of attorney with the utmost care protects donors from undesirable consequences due to the actions of the donee. When it specifies actions on your behalf relating to possessions that you own, such as bank accounts, shares, property, etc, it is especially important to have your power of attorney drafted with extreme caution. Unfortunately, some dubious agents have been known to exploit or misappropriate power of attorney documents for their own nefarious purposes. This would necessitate legal battles in court, which is not a good option. As a result, it would be prudent to enlist the assistance of competent legal counsel when creating comprehensive power of attorney agreements.

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