Power of Attorney | Risks, and concerns for NRIs

Power of Attorney
Real Estate » Power of Attorney | Risks, and concerns for NRIs

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NRIs especially the ones who have businesses across the globe have a particularly hard time. When it comes to making decisions, sensitive decisions that have a larger impact usually require the presence of the individual to sign documents. To save on time and money traveling back, the power of attorneys can be signed.

A power of attorney basically grants another person the power to make decisions on behalf of another person. The power of attorney can allow the said person to make limited decisions or all decisions from financial, and medical to investment decisions as well.

What Is A Power of Attorney?

A power of attorney is a legal paper that allows a person to make decisions on behalf of another. The power of attorney can be used for personal, business, and legal matters as well. The person who is giving the power of attorney is called the grantor while the other person is known as the agent. The power of attorney will allow the grantor to make financial transactions and important business decisions. They can also purchase insurance, employ people, etc with the power of attorney.

For NRIs, a power of attorney is especially helpful as it means they do not have to be present physically in India to conduct their affairs.

Types of Power of Attorney

To further continue the discussion of the power of attorneys, let us understand the different types of power of attorneys.

General Power of Attorney:

Per the name, the general power of attorney gives the power to the agent to act on their behalf. Some of the matters where this type of POA comes into play are legal, financial and also real estate.

Limited Power of Attorney:

A limited power of attorney is created for a specific purpose only. Once the purpose is met, the power of attorney expires. For instance, the POA could be to pay bills, sell properties etc.

Medical Power of Attorney:

The last type of power of attorney is a medical POA. This POA has two agents, one to carry out financial decisions and the other to make medical decisions. The medical power of attorney is usually granted to children who carry out the POA on behalf of their parents when they fall sick.

Can NRI give power of attorney in India?

Non-resident Indians can give power of attorney to a person in India. Typically, most NRIs exercise this right for real estate management. In India when buying or selling properties, the Government requires the signature of both parties during registration. Since NRIs cannot be present in person, their agent can sign the registration document with their power of attorney. This power of attorney for property in India also comes in handy when the NRI cannot make decisions due to poor health and there is an urgent matter to attend.

How can I give someone in India a power of attorney while overseas?

When talking about NRI power of attorney one important concern is foreign power of attorney validity in India. Undoubtedly, if an individual is following the due process and getting the power of attorney done as per the legal route and done as per the power of attorney new rules in India, there would be no questions regarding validity. In India, the process for an NRI to get a power of attorney is as follows:

  • To start, the individual must have the power of attorney drafted with the required terms and conditions, on a judicial stamp paper. The stamp paper must be around of value INR 100.
  • Get the agent or the legal representative’s signature along with the signatures of two witnesses.
  • Take the signed stamp paper to the sub-registrar’s office with all concerned people and their identity proof.
  • At the sub-registrar’s office, the signatures, fingerprints, and photographs will be collected from all people present.
  • The registered power of attorney can be then collected from the sub-registrar’s officer on the due date. On average, the due date is around five days from the submission of the document.

Risks and Concerns Regarding Power of Attorneys for NRIs

With any decision that involves a little bit of money, with a power of attorney, there are many risks. Especially in the case of NRI power of attorneys, there are many risks that one must keep in mind to avoid.

The first major risk is choosing the wrong person as the agent. Trusting someone to take financial, legal and even medical decisions for someone else is massive. The NRI needs to ensure that they are absolutely sure of their agent’s integrity. The agent must be trustworthy and also give regular updates to the power of attorney granter. It must be kept in mind that any fraud or illegal misdoings of the agent would mean that the grantor is also doing them.

It is advisable to always limit the powers of the agent in the power of attorney. One must also contact an experienced lawyer who specializes in the creation of a power of attorney in order to craft the perfect power of attorney.

Revoking Power of Attorney

Sometimes, conditions could arise where one has to revoke to nullify a power of attorney. It is not necessary, legally, to have any reason to do so. Merely having second thoughts about the agent is sufficient grounds to revoke power of attorney.

The agent could also refuse to perform their duties after the power of attorney has been created.

To revoke the POA, a signature of a public notary is necessary. An affidavit letter stating the intent to revoke the power of attorney should be sent to the former agent.

The same letter must also be sent to all financial institutions and related organizations so that they are informed there is a new agent.

After the power of attorney has been revoked, the document must be notarized.

The new power of attorney must also have a reference to the previous agent and all concerned parties must be notified of the new power of attorney.

Getting a power of attorney, as an NRI, is not tough but is definitely time-consuming. This is a delicate but important decision to make that must be made under the guidance of experts. The lawyers at Lex Solutions have years of experience with the power of attorneys and are the best to craft the perfect power of attorneys for NRIs.