special powers of attorney

                                  Special powers of attorney

A special power of attorney is a legal document outlining the scope of authority. A Special Power of Attorney allows a person (the “agent”) to act and make decisions on another person's behalf (the “principal”). The agent is granted specific and limited powers to handle the principal's affairs (i.e. property, financial, legal) by the principal. Under the special power of attorney, an agent is given the powers to act on behalf of the principal to make specific legal or financial decisions. Special powers of attorney is used as evidence of the principal’s authority to the third person with whom the principal may be dealing with.

    Other Names for a Special Power of Attorney is

• A Limited Power of Attorney

 A power of attorney is an agreement between two individuals that allows one individual to act on the other's behalf. For example, you might want a power of attorney if you are out of the country and unable to carry out a business transaction yourself, or if your abilities are limited by a medical condition. The person who initiates a power of attorney, whether in oral or written form, is referred to as the grantor or principal. The authorized individual named in the agreement is referred to as the attorney in fact or agent. In the case of a special power of attorney, the actions that the agent can take are limited to very specific circumstances.

Because this type of power of attorney is limited to what has been laid out in the signed document, it is particularly important that the principal is very clear about the powers that they want the agent to have. Additionally, the principal may create more than one special power of attorney, naming a different individual in each one.

      You can have more than one special power of attorney, depending on your financial situation. For example, you might set one up for your spouse to allow them authority when managing day to day financial affairs, such as bank accounts. But you might have a separate limited power of attorney for your financial advisor or investment manager to handle your portfolio when you’re unable to.

Application of General Power of Attorney

Special power of attorney act is covered under “POWER OF ATTORNEY ACT, 1882”, which was passed in the year 1882 on 24th February and the act came into force on first day of May, 1882. This act applies to the whole of India except State of Jammu & Kashmir. The main aim of passing this statute is to make it easy for your designated attorney to access your finances and, in that way, take care of your property.

When do you need a Special Power of Attorney?

A Special Power of Attorney is necessary if you wish to appoint another person to act and make decisions on your behalf.  

A Special Power of Attorney is normally executed when the principal is unable to manage his affairs & decide on his own and will need an agent to act on his behalf.   However, it may also be executed even if the principal is not incapacitated and just wishes to appoint an agent to manage his affairs.

What Can You Use a Special Power of Attorney For?

You can use a Special Power of Attorney form to grant someone else the authority to handle any type of matter you anticipate will need to be dealt with while you are unable or unavailable to do so yourself. A Special Power of Attorney may be granted for a limited time period or specific purpose related:

1. Healthcare

2. Care and custody of children

3. The sale or disposal of assets

4. Buying or selling a property

5. Managing your business

6. Managing your finances

A Special Power of Attorney protects you by ensuring that your property, financial, legal and other matters are taken cared of even if you are incapacitated and unable to decide.  It ensures continuity in the management of your affairs even if something were to happen to you.

      The primary reason to use special power of attorney is to make sure your finances and other legal affairs continue to be managed the way you want them to in situations where you’re not able to handle things yourself. If you’re in a serious accident, for example, or you become terminally ill then your agent would be able to take care of specific financial or legal decisions based on your wishes.

         One thing to keep in mind is that special power of attorney only applies during your lifetime. If you were to pass away, then the power of attorney would terminate. At that point, your assets would be managed subject to the terms of your will or trust, if you have either one. In situations where someone dies without a will, assets are distributed according to the inheritance laws of their state.