What is a power of attorney?
We often hear the term ‘Power of attorney’ being thrown around in different scenarios but what does it actually mean? A power of attorney is an authorisation given from one person (let’s call him A) to another person (let’s call him B) to allow B the right to to act on A’s behalf when A is unable to manage his own affairs.
There could be various instances when a power of attorney may be needed. For example, when a person is out of the country and wants someone within to manage their affairs, or when a person is too sick to manage their own affairs.
There are two different types: a general power of attorney or a special power of attorney.
A general power of attorney is a very wide authorisation and can be interpreted very broadly. One should be very careful when performing a general power of attorney to pay heed to the wide variety of powers that a general power of attorney provides.
A special power of attorney is often provided for a specific purpose and does not provide a wide variety of powers. The powers are limited to the specific purpose that it was provided for.
For a power of attorney to be valid:
- The parties must be clearly defined.
- The extent of the powers being provided must be clearly defined.
- It must be signed by the person giving the power as well as two witnesses.
- The witnesses cannot derive any benefit from the power of attorney.
A power of attorney remains valid and enforceable until:
- It is revoked.
- All duties have been fulfilled and complied with.
- The person granting the power of attorney passes away.
- The person granting the power of attorney is sequestrated.
- The person granting the power of attorney becomes mentally unfit.
When looking to put together a power of attorney, always seek expert legal advice to ensure that all your bases are covered as a power of attorney is a very powerful document once it has taken effect.