Creating a Power of Attorney

A Power of Attorney (POA) is a legal document that gives one person, referred to as the Principal, the authority to designate another, referred to as the Attorney to act on their behalf and make decisions. When an individual is unable to manage their own financial, legal, or personal matters because of absence, illness, or incapacity, this document is crucial. 

The Two Types of Power of Attorney 

General Power of Attorney 

Enduring Power of Attorney 

• General Power of Attorney (GPOA) 

It grants broad powers to the attorney to manage the principal’s affairs. This type of POA is typically used for a specific period and purpose, for instance when the principal is traveling abroad.  However, the GPOA ceases to be effective if the principal becomes incapacitated mentally.  

• Enduring Power of Attorney (EPOA) 

Unlike the General POA, an Enduring Power of Attorney remains in effect even if the principal loses mental capacity. It is a crucial document for long-term planning, ensuring that the principal’s affairs are managed if they become incapable of making decisions.  

Roles and Responsibilities of Parties to Power of Attorney  

Parties to POA: Principal and Attorney 

1. Principal is an individual who grants the authority to another person to act on their behalf. The principal can set limitations on the powers given.  

2. The person designated to act on behalf of the principal is known as the Attorney. 

How to Designate a Power of Attorney? 

Selecting the appropriate person as an attorney is critical. The appointed person must be reliable, trustworthy, and capable of handling the responsibilities involved. It is advisable to take into account someone who is capable of doing the assigned tasks and who is aware of the principal’s preferences.  

What are the Legal Requirements?  

Although the legal requirements in relation to POA would vary by Jurisdiction there are common requirements to be fulfilled. 

• It shall be in writing and signed by the principal. 

• It must be witnessed by an independent adult who is not a relative of the Principal or the Attorney. 

• If it is Enduring Power of Attorney, being registered with a legal authority is not mandatory. However, there are exceptions, such as when the attorney needs to deal with any real estate.  

Can a Principal Make Any Changes or Revoke the POA? 

Yes, most of the time principal can make any change or revoke the POA proving that they are mentally competent. However, it should be writing and communicated to all relevant parties including the attorney and institutions where the POA may be used. Most importantly the principal can also appoint a new Attorney by creating new POA if he feels an attorney is no longer suitable to act on behalf of the principal. 

A Power of Attorney is an essential legal tool for handling one’s affairs. It gives one piece of mind and guarantee that decisions can be taken even in the event that the principal is incapacitated. Always when preparing the POA, the kind, the attorney of choice, and the applicable legal requirements should be carefully considered. By understanding these key aspects, individuals can make informed decisions and ensure their wishes are respected.