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A power of attorney (POA) is a legal document that gives a person (agent) the power to legally act on behalf of another person (principal).
A power of attorney (POA) is a legal document that gives a person (agent) the power to legally act on behalf of another person (principal). The agent can have a broad legal authority or a limited legal authority to make legal decisions for the principal on matters such as his property, finances or medical care. Often, POAs are used in cases of the principal being ill or disabled, or when the principal can’t be personally present to sign legal documents.
A person appointed under a POA does not necessarily have to be an
attorney. The person could just be a trusted family member, friend or
It is good to choose a trusted family member, a proven friend or a reputable and honest professional as the POA. Signing a POA that grants broad authority to an agent is like signing a blank cheque. Hence, it is important to choose the POA wisely and understand the laws that apply to the document.
A general power of attorney gives the power to the person appointed under it to act on behalf of the principal on all matters as permitted by law. The agent under a general POA agreement may be authorised to take care of issues such as signing cheques, handling bank accounts, filing taxes, selling property and assets like stocks, etc. on behalf of the principal.
A limited power of attorney gives the agent the power to act on behalf of the principal only in specific matters or events. For example, the limited POA may state that the agent is only allowed to manage the principal’s retirement accounts. A limited POA may also be limited to a specified period of time.
As a general rule, any person who is capable to enter into a contract is
eligible to apply for a power of attorney. This means all persons who
are not explicitly disallowed from entering into a contract can apply
for a POA. According to the Indian Contract Act, the following persons
are incapable to enter into a contract:
If the principal becomes incapable of making decisions for him or
herself, the POA agreement automatically ends. However, if the principal
wants the POA to be in effect even if his health deteriorates, he would
need to sign a durable power of attorney (DPOA).
A power of attorney can end for a number of reasons including: