For What Purpose Power Of Attorney Is Drafted?

In the most basic terms, it is the authority (right) that a person (principal) grants to an attorney (legal representative). A principal-legal representative relationship is formed between the two, and the principal is bound by the actions of the legal representative. For example, if a person purchases a property in India but is unable to be physically present to complete the registration, he can delegate these rights/duties to a relative/friend via a registered power of attorney.

The purpose of the PoA is to enable individuals, including NRIs, to effectively manage their assets and interests in India, even when they are absent. The Power of Attorney (POA) can be used for the following purposes: mortgage, exchange, sale, lease, rent collection, grant, and borrowing, Managing and settling disputes, and performing the acts required by banks and insurance companies, such as entering into contracts, dealing with bonds, etc.

Types of Power of Attorney

• General Power of Attorney, also known as conventional Power of Attorney, is the most common type of power of attorney in India. This is signed to authorize the power of attorney holder to make decisions on the principal’s behalf in a variety of matters. This could include legal issues, business transactions, or even medical decisions. It is critical to sign a general power of attorney for all purposes with a trustworthy party.
• A special Power of Attorney is also known as a Limited Power of Attorney. As the name suggests, this type of power of attorney allows the holder to exercise only limited powers. The PoA holder has the authority to make decisions for a specific period and for certain responsibilities delegated by the principal, such as signing a specific agreement.
• The durable Power of Attorney is effective from the time it is signed until the principal dies or decides to cancel it. In India, this type of Power of Attorney allows the holder to make decisions on behalf of the principal when they are unable to do so themselves.
• The financial power of attorney (POA) is the practice of appointing someone to make financial decisions regarding your business and property. In India, Powers of Attorney are classified into three types: general PoA, limited PoA, and durable PoA, with corresponding rights and responsibilities. The holder of the financial Power of Attorney can practice a variety of financial activities such as making deposits, signing checks, withdrawing funds, and so on.

Flexibility of Power of Attorney

A power of attorney has traditionally been viewed as an instrument used to administer a person’s affairs when that person becomes mentally incapacitated or is unable to effectively manage their interests. Many people believe that power of attorney is used as a last resort when people are no longer able to make their own decisions. A printable power of attorney is a very flexible legal instrument that can be used in a variety of scenarios to assist people in both day-to-day affairs and complex legal arrangements.

A power of attorney, while still a serious instrument for managing the affairs and estate of mentally incapable loved ones, has evolved into a useful mechanism that allows people to delegate authority to professionals with specialized skills who can represent them in legal, business, and financial arenas where the person may lack specific knowledge. This gives people the opportunity to level the playing field when dealing with larger institutions that have paid professional staff to act on their behalf.

Pro Tips on Obtaining an Effective Power of Attorney

The following tips and tricks will help you protect your interests through an effective Power of Attorney:

• Since there are so many different types of power of attorney, there is no specific power of attorney format.
• The legal validity of your POA may vary from state to state in India, so consult with a legal professional before entering into a POA.
• According to the Registration Act of 1908, it is not necessary to register the Power of Attorney.
• Consult with experts before getting your power of attorney stamped, as stamp duty charges vary by state. Additionally, seek legal advice before granting someone your POA.

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