POWER OF ATTORNEY AND ITS TYPES-ALL YOU NEED TO KNOW

POWER OF ATTORNEY AND ITS TYPES-ALL YOU NEED TO KNOW

Power of Attorney Act 1882, power of attorney includes any instrument empowering a specified person to act for and in the name of the person executing it.

Power of Attorney is very well known as Power of Attorney or Power of Authority which is the authority to act for another person in specified or all legal or financial matters. The one who gives authority to some trustable person is known as a principal or a donor.

There are various situations in one’s life where an individual possessing properties, bank accounts, etc. may not be in a position to perform his duties due to reasons like being abroad, physically ill, old age, etc.

In such situations, if the transaction requires the presence of the individual who is not able to be present personally, then the only way out is to give the powers to act on behalf of the individual to another person. This is when a Power of Attorney deed is to be created.

TYPES OF POWER OF ATTORNEY :

General Power of Attorney (GPA)

When a person is authorized with absolute general right or power to act legally with respect to the property or bank accounts or tax payments, or registration work or to file a case against 3^rd party, etc by another person is termed as a GPA. An individual can either give a GPA for all his properties, banking transactions, tax affairs, registration, legal disputes as well as court matters, etc., or can simply grant a general power pertaining to just one category from above. For instance, power relating to property matters only. This transfer of general power is extremely broad and therefore, has a lot of risks involved in case the Agent/ Attorney is not a dependable individual

2. Special Power of Attorney (SPA)

A SPA is the transfer of special power that is only granted for a specific assignment and once the specific assignment is completed the SPA automatically comes to an end. A typical example of a SPA is when people rent out their property or when the agent appears for the registration of the principals’ property or when the agent appears n a court or before the Tax authorities on behalf of the Principal etc.

BENEFITS OF POWER OF ATTORNEY

Avoids stability at a particular place
Provides the ability to choose who will make decisions for you.
Gives an opportunity to the family members to remain as an agent or hold the authority of the Power of Authority.
Allows the agent to perform planning and transaction for the principal.
If the agent is a family member or a trustable person, then there is no need to worry about anything.