Power of Attorney / Appointment / Letter of Authority

These documents relate to an individual appointing a POA/appointee. Please refer to the Business section for Corporate appointment documents.

 A. Power of Attorney

A Power of Attorney (POA) is a document that allows you to appoint a person or organization to manage your affairs if you become unable to do so. An instrument creating a Power of Attorney must be executed in the form of a Deed. Strictly, a Power of Attorney (as opposed to the less formal appointment of an agent) is only required where the Attorney is to execute a deed on behalf of his appointor. Here are some common examples:

1. General Power of Attorney  

General Power of Attorney gives broad powers to a person or organization (the Attorney) to do anything that an attorney can lawfully do in acting on behalf of the Principal. A general power of attorney must be made in statutory form. A General Power of Attorney is an effective tool if the Principal needs someone to handle certain matters in a different jurisdiction, or when the Principal is physically or mentally incapable of managing their own affairs. 

2. Special Power of Attorney 

Special Power of Attorney gives specific powers to act on behalf of the Principal. This is often used when one cannot handle certain affairs due to other commitments or health reasons. For example, selling or managing property, execution of documents, and handling business transactions are some of the common matters specified in a special Power of Attorney document.

3. Medical Power of Attorney 

It appoints an Attorney to make medical, health, and care decisions in case the principal becomes incapacitated / lacks the mental capacity to make decisions. While not the same thing as a living will, many jurisdictions allow you to include your preference for being kept on life support. 

4. Enduring / Continuing / Durable Power of Attorney 

Some individuals may not be ready to make the decisions but wish someone else to make the decisions on their behalf. They may wish to grant a power of attorney in advance to make medical decisions or to take care of financial affairs in case of incapacitation or lack of mental capacity to make decisions. It can specify in the Power of Attorney that it cannot go into effect until a doctor certifies the Principal as mentally incompetent. It can also specify the medical practitioner. An ordinary Power of Attorney is automatically revoked by the mental incapacity of the Principal, which is why an Enduring POA is required in this instance.

 B. Power of Attorney Format

 The essential requirements of a Power of Attorney format are as follows:

• A power of attorney must be executed by deed.
• The instrument creating a power of attorney must be signed and sealed by the principal in the presence of a witness.  

It may be signed by another person at the direction, and in the presence of the principal, provided there are two witnesses present to attest to the principal’s signature.

C. Execution of Power of Attorney

The formalities of an Enduring / Continuing / Durable Power of Attorney are similar to a General Power of Attorney or a Special Power of Attorney. Where most Power of Attorneys may be invalidated when the donor loses mental capacity, the Enduring Power of Attorney continues. In certain jurisdictions, there are strict requirements on the formalities of an Enduring Power of Attorney (please check with a local lawyer as each jurisdiction may be different), for example:

• it will need two witnesses - a registered medical practitioner and a solicitor;
• the witnesses must not be the donor, the attorney(s), or related by blood or marriage to the donor or the attorney(s);
• the attorney(s) cannot be the witnesses or related by blood or marriage to the witnesses;
• the witnesses (i.e. the medical practitioner and the solicitor) must witness the signature together and each certifies that the donor is mentally capable.

In certain jurisdictions, there is also a registration system in court/government office for the Enduring Power of Attorney to be effective. In addition, some jurisdictions may require it to be in a prescribed form for it to be valid.

D. Power of Attorney Duties

1. Principal's duties

An Attorney is generally entitled to assume that a Power of Attorney has been validly granted. Where this turns out not to be the case, it appears that the Attorney will be entitled to indemnification from the Principal for the loss he suffers as a result. The Principal is also liable to indemnify the Attorney against expense and liability he incurs in performing acts under the power, except where the Attorney acts beyond his power, and his acts are not ratified by the Principal. 

A Power of Attorney often includes an undertaking by the Principal to ratify action taken by the Attorney under or purportedly under the power. The effect of such an undertaking is unclear. Action taken by the Attorney which is within the scope of his authority under the power will be binding on the Principal without any need for ratification. Acts outside the scope of that authority will not be binding. 

2. Attorney's duties

An Attorney owes various duties to his Principal:

• There is no obligation on an unpaid Attorney to act on the power appointing him. Once he does so, though, he must not go beyond its scope. He must not act once he knows the power has terminated. A paid Attorney is obliged to carry out the duties imposed and may be liable for failing to do so.
• A paid Attorney must exercise the skill, care, and diligence of a reasonable man and, where he undertakes his duties in the course of a profession, must display proper professional competence. An unpaid Attorney must use whatever skill he has (and any special skill he has held himself out as having), as well as apply the same care and skill he would apply to the conduct of his own affairs.
• An Attorney must not put himself in a position where the duty he owes his Principal conflicts with a duty he owes to another person. 
• The Attorney must account to his Principal for any profits he makes. 
• The Attorney must keep the Principal's money separate from his own, and anyone else's, money. He holds the Principal's money in trust.
• An Attorney can delegate his powers and duties only if he has either express or implied power to do so.
• The Attorney is obliged to keep his Principal's affairs confidential unless disclosure is authorised.

E. Appointment / Authorisation Letters

Appointment / Authorisation Letters are less formal documents than a Power of Attorney. Unlike a Power of Attorney, they do not need to be executed as a deed and thus fewer formalities are required in the execution. They are generally used to inform third parties that the person is properly authorised. The following table is a quick reference guide on the documents on DocPro: