Page 227 - DMGT515_PERSONAL_FINANCIAL_PLANNING

Personal Financial Planning

Notes Power of Attorney

A durable power of attorney allows a person you designate to access and control your financial
assets. It can take effect immediately, or it can “spring” into effect if an event you define triggers
its operation, such as incapacitation or unavailability.
Power of Attorney’ is defined under Indian law as a legal document in which the appointer of
the document authorizes someone else to act on his behalf. The rights conferred to the person
depend on the specific conditions included in the format of this document, called the Power of
Attorney form. Sometimes, the rights of the appointee are very limited and in some cases, the
powers are very broad.
The appointee can be bestowed with several rights, such as the right to sign a contract on your
behalf, the right to take your health care decisions, the right to handle your monetary transactions,
the right to sell your property or any other legal right.

Indian Law: How to Issue a 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
authorize the appointee to carry out on your behalf.

!

Caution If you want to authorize someone to act as a power of attorney on your behalf, it
must be signed and notarized by a certified notary advocate, who is able to declare that
you are competed 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.
Indian Law: Types of Power of Attorney Documents

Here are some types of power of attorney documents:
Limited Power of Attorney
A limited power of attorney gives the appointee very limited powers, to do a specific act, such
as authority to sell property on the appointer’s behalf.
General Power of Attorney
A general power of attorney authorizes the appointee with several rights and very broad powers,
to execute any legal act on behalf of the appointer. This type of a Power of Attorney provides a
list of activities that the appointer wants the appointee to perform on his behalf.
Durable Power of Attorney

A general or limited power of attorney expires in case the principal or appointer becomes
incapacitated. A durable power of attorney was created to overcome this limitation. A durable
power of attorney does not terminate, if the appointer becomes incapacitated. It still remains
effective. However, a durable power of attorney must include specific conditions, which authorize
the appointee to survive the incapacity of the appointer. Such a power of attorney comes into
effect as soon as it is signed by the appointer, unless restricted by some legal condition.

222 LOVELY PROFESSIONAL UNIVERSITY