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Inasmuch as human being becomes busier, it becomes more necessary for him to
depend on others for getting his things done. Owing to this reason, the power
of attorney is now playing vital role.”
In the hands of someone
trustworthy, a power of attorney can be an important tool to manage the
finances of an elder who has become permanently or temporarily unable to handle
financial affairs. But, in the hands of a financial predator or a greedy family
member, a power of attorney can be used to secretly steal money and assets,
readily bypassing the normal safeguards that are employed by financial
institutions.
What Is a Power of
Attorney?
A power of attorney is
a written authorization giving one person the legal authority to act for
another person, typically regarding financial affairs like bank accounts and
investments.
Need for Power of Attorney
As man became busier it became more and more
necessary for him to depend on others for getting his things done. The hectic
activities of the businessmen and industrialists have made the execution of
power of attorney for delegating his functions.
Uses of Power of Attorney
The Power
Of Attorney In Real Estate Field
1. To
sell, exchange, lease, collect rents, grant, bargain, or borrow and mortgage .
3. To manage, compromise, settle, and adjust all
matters relating to real estate;
1.
To add to or withdraw any amounts from any of my bank accounts, Certificates of
Deposit, Money Market Accounts, etc.
2.
To make, execute, endorse, accept and deliver any and all cheques and drafts
3.
Execute or release such deeds of trust or other security agreements as may be
necessary
1.
To file, sign all tax returns, insurance forms and any other documents
2. To represent in all matters
concerning the foregoing.
Stocks,
Bonds, And Securities
1.
To sell any and all shares of stocks, bonds, or other securities
2. To make, execute, and
deliver any assignment, or assignments, of any such shares of stock, bonds, or
other securities.
Case Law:- Misuse of Power of
Attorney
An elderly
retired gentleman, lived alone with no immediate family. One day he suffered an
injury that required his hospitalization. He knew he would be away from home
for weeks and was worried about paying his bills. His nephew arrived at the
hospital with flowers and an offer to help.
The next day the nephew
showed up with a power of attorney, which his uncle signed. By the time the
elderly man had returned home, his nephew had robbed him blind, using the power
of attorney to close bank and investment accounts. Assuring his uncle he was
merely keeping the money safe, the nephew had instead transferred the money to
an accomplice, who in turn invested it in a mobile home development in South
Carolina.
When the uncle sued, the
nephew maintained that his uncle had gifted him the money out of love and
affection, and the power of attorney was evidence of the trust his uncle placed
in him.
Buy Power of Attoney Self Help Guide
Law for Power of Attorney
Law for Power of Attorney
POWER OF ATTORNEY ACT, 1882, which was passed in the year 1882 on 24th feb and the
act came into force on first day of May, 1882. This act applies to the whole of
India except State of Jammu & Kashmir.
Difference between Power of Attorney and Will
So many
people confuse the power of attorney (POA) with a will (Probate), but these
documents are two very different things and have two very different functions.
A will comes into effect on the day person die. A POA applies during a person’s
lifetime and ceases to apply when he dies.
Classification
of Attorney:
I. General Power of
Attorney: A general power of attorney is one by
which an instrument is executed by the principal authorising the agent to do
certain acts in general on his behalf. The word ‘General’ here means that the
power must be general regarding the subject matter and not general with regard
to powers in respect of a subject matter. If the subject matter is not general
but restricted to something either specific or specifically mentioned by the
principal while drafting an instrument then it will not constitute a general
power of attorney. It is otherwise called as limited power of attorney.
Duration : A general power of attorney remains in force unless expressly
revoked or determined by the death of either of the party
The Supreme Court held that the GPA method of immovable property sales is not a valid form of transfer of property. the court said any
contract of sale which was not a registered sale deed would fall short of the
requirements of the relevant provisions
of the Transfer of Property Act and could not confer any title. The court said
a transfer of property by way of sale could only be by a sale deed. "In
the absence of a deed of conveyance (duly stamped and registered as required by
law), no right, title or interest in an immovable property can be transferred,"
the bench said
II. Special Power of
Attorney: A special power of attorney is one by
which a person is appointed by the principal to do some specified act or acts.
In this type of power of attorney, an agent conferred with a power to do
specific act in a single or specified transactions in the name of the
principal.
Duration : A special
power of attorney will be in force until the specified act is not completed.
III. Durable
Power of Attorney: A Power of Attorney which specifically
says otherwise, agent’s power ends if principal become mentally incapacitated.
However, a power of attorney may say that it is to remain in effect in the
event of future incapacity of the principal. A power of attorney that says this
is called a durable power of attorney.
Authentication
of power of Attorney
As per Indian law, a power of attorney is a legal
document that has to be properly framed, using the right legal terminology and
setting out the objectives and responsibilities that you wish to authorise the
appointee to carry out on your behalf. If a person wants to authorise someone
to act as a power of attorney on his behalf, it must be signed and notarised by
a certified notary advocate, who is able to declare that you are competent at
the time of signing the document to issue the said power of attorney. You will
need to show your ID to the notary advocate before he/she is able to certify
and issue the document. It must be executed and authenticated by the registrar
or sub-registrar of assurances as per the ‘Registration Act, 1908’.
Original
Documents To Be Verified
A power of attorney which is accurately
authenticated by the notary or any magistrate, an affidavit has to be filed
with all the original documents of the power of attorney authorising an agent
to do certain acts. All the documents will be verified by the court and then
court will register power of attorney by putting seal and sign. It is very much
essential to make the power of attorney valid.
Registration
A power of attorney is not compulsorily registrable
unless it creates an interest in any immovable property i.e. charge in favour
of donee. Registration of power of attorney is optional In India, where the
‘Registration Act, 1908’, is in force, the Power of Attorney should be
authenticated by a Sub-Registrar only, otherwise it must be properly notarized
by the notary especially where in case power to sell land is granted to the
agent. If a power of attorney is in respect of an immovable property of value
more than Rs100 it must be registered. Registration of power of attorney
authenticates the deed of power of attorney.
Stamp Duty
A power of attorney is chargeable under Section: 48
of Schedule 1 of the ‘Indian Stamp Act, 1899’. A stamp duty has to be paid
compulsorily by the principal or donor in the jurisdictional registrar’s
office.
Preventing Power of Attorney Scams
· Do not grant a power
of attorney to anyone unless you know the person well and completely trust him
or her.
· Do not release the
power of attorney until it is needed. In the meantime, keep the signed power of
attorney in your attorney's offices.
· If a power of attorney
is needed, but you are later able to manage your affairs again, immediately
take back the power of attorney.
· If the agent in a power of attorney transfers property into his
or her own name, demand in writing that the agent immediately return the assets
and render an accounting. It may be wise to contact an attorney at this point.
·
If the agent refuses
to return the property, immediately contact an attorney.
Revocation Of Power Of Attorney
Power of Attorney can be revoked in the following cases,in case of :
1.
Revoked by the principal himself
2.
The principal dies or becomes insane or becomes bankrupt
3.
The business for which the agent was appointed is over
4. Mutually agreed upon by the principal and
agent
5. The right under the power
of attorney is renounced by the agent
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