Everyday complexities, duties and workload demand high-level multi-tasking which makes it tough for an NRI to tackle business in India. This can be solved with the help of Power of Attorney (POA). The need for POA has increased over the years due to the changing working environment and lifestyle which requires a lot more commitments than before.

Importance of the POA

It becomes difficult for the individuals living outside India to travel back and forth to perform small transactions or make some decisions. In such a case, NRIs need a solution that can help them to tackle the problem as well as restrict their time wastage and traveling expense.

POA gives the power to take decisions and legal actions on one’s behalf but what most people don’t understand while providing a POA is that they can specify the rights being transferred. They make the mistake of giving General POA to the person who’ll act on their behalf.

In some situations, an NRI has to come up with documents within a short notice, giving authority to someone else to act on his/her behalf, and usually he/she doesn’t realize that the issuance of General POA can cause a major problem for him/her in the future.

General POA and Its Difficulties

General POA gives right to make any legal and financial transaction, create a document and make major decisions. Giving total rights to somebody can sometimes result in the individual losing what was once owned or lead to legal disputes.

We have had many cases in the past in which an NRI found himself in a problem after issuing a General Power of Attorney. Therefore, while issuing a POA one should know the exact reason behind the POA and then specify the rights and duties on it.

So basically the NRI should understand –

  • Why is he issuing the POA?
  • Does he trust the person he is giving the right to act on his/her behalf?
  • What exactly does he want the person to do?
  • How long will it last?

Precautions while issuing a POA

After deciding about the facts mentioned above, the individual should decide whether to issue a General POA or a Special POA. For this, it is important that he/she understands the rationale behind the issuance. We normally advise that issuing of a GPA should be avoided for the following reasons:

  • With the issuance of General POA, the executor of the legal document gives them freedom to act as they wish on his behalf.
  • The POA holder can take transfer the property in his/her name or take some action which can cause a legal problem against the POA executor.
  • The NRI can become a victim of fraud, negligence, trespassers, the sale of the property, illegal possession of the property, criminal litigation, or complete loss of his/her ownership.

Often people make the mistake of trusting a person blindly. Although he/she can be one’s close relatives, friends or some other trusted known person, one can never be sure of the intentions of others. So it’s imperative that the NRI should be entirely sure of the person before giving him the legal right to act on his/her behalf.

While the Power of Attorney itself is often a very common and simple document, there are important responsibilities and limitations of authority which appear from time to time.  It is crucial that one knows his/her role in the issuance of such an important legal document. Understanding that the mere decision of unloading a small part of his/her problem by trusting another person can create havoc in his/her, life if the decisions are not taken after considering all the facts.