18 JUNE 2018
Chances are you've heard the term Power of Attorney, or POA. But you may still wonder what it is and if you need one. No worries. This article explains everything you need to know.
A Power of Attorney (POA) is an instrument or a document by which one person ("Donor") gives another person ("Donee") the power to act on his behalf. It gives someone the power to make legal decisions on a specific matter, or on every matter.
A Power of Attorney helps meet personal and business commitments if you are unable to execute yourself or are incapacitated. Since everyone may face circumstances in the future when they cannot or are unable to execute these commitments themselves, a POA is exactly what is needed.
There are two main kinds – General or Sole Purpose. Each POA provides different levels of control. The POA can either be revocable or irrevocable.
Let's examine what is a POA, and the different types available.
Types of Power of Attorney
All POAs are not the same. Each kind gives the person who makes decisions on your behalf a different degree of power or control.
Templates available on this website are only for matters located in Peninsular Malaysia. The person or company assuming Power of Attorney must be based in Malaysia. The individual or company (a Donor) appointing the attorney (a Donee) may be based in or outside of Malaysia.
A General Power of Attorney gives broad powers to a person or organization. The person or entity acting for you is your Donee.
The general powers include:
A General POA is a good choice if you need someone to manage your business while you're out of the country. It's also used when a person is physically or mentally incapable of taking care of their own affairs.
Often, an estate plan includes a General POA. This guarantees someone can handle the financial matters related to the estate. If you want to grant a specific power, refer to the Sole Purpose Power of Attorney section below.
Sole Purpose Power of Attorney
You don't have to give your Donee control over everything. Instead, you can specify exactly what powers you want someone to have. You may limit the powers granted to the Donee by specifying the extent of the power or any specific limitations which must be followed by the Donee.
The Donor may specify the obligations, responsibilities and undertakings of the Donee in acting on behalf of the Donor and in carrying out his duty as the Donee.
A Donee with Sole Purpose POA can sell property, manage real estate, collect debts, and take care of business matters. Their duties and responsibilities are limited to the power stated in the POA.
A Sole Purpose POA outlines exactly which areas the Donee can manage.
Revocable and Irrevocable Power of Attorney
A revocable clause in the POA allows you to revoke the powers granted to the POA agent at any time, and is usually vital that this clause is inserted.
However, there are certain situations which call for irrevocable POA, which means you are giving up your right to revoke the POA, and will be in effect unless a fixed time for the revocation of the POA was specified.
Choose the Right Person as Your Donee
You must trust the Donee you choose for your POA. Pick someone you know will keep your best interest in mind when making decisions. You want someone who won't take advantage of the powers.
Your Donee must keep accurate transaction records, and give regular updates. If you can't review reports yourself, have your Donee give the reports to a third party for review.
The Donee doesn't have any legal liability unless there's intentional misconduct. Donees usually perform their duties for free.
If you suspect a Donee is abusing the position, or doing something illegal, report it to law enforcement and consult a lawyer.
Ensuring a Power of Attorney meets Legal Requirements
The original POA must be signed and notarized to be legal. Execute three certified copies. Your Donee needs certified copies to act on your behalf.
There must be an authentication clause that meets requirements prescribed in the Powers of Attorney Act 1949 [Act 424]. If your POA is executed within Peninsular Malaysia, the deed can be executed before and is authenticated by a Magistrate, Justice of the Peace, Land Administrator, Notary Public, Commissioner for Oaths, an advocate and solicitor or an officer, acting in the course of his employment, of a company carrying on the business of banking in West Malaysia and incorporated by or under any written law in force in West Malaysia.
If the POA is executed outside Peninsular Malaysia, the deed is executed and authenticated before a Notary Public, Commissioner for Oaths, any Judge, a Magistrate, or a British consul or vice-consul.
If it is executed in the Kingdom of Saudi Arabia, the execution of such deed must be authenticated by the Malaysian Pilgrimage Commissioner.
A deed executed in the Republic of Singapore must be authenticated by an advocate and solicitor of the Supreme Court of the Republic; or an officer, acting in the course of his employment, of a company carrying on the business of banking in the Republic and incorporated by or under any written law of the Republic.
Upon completion, you must have the POA stamped with the stamp office. After three copies of POA are stamped, the POA must be registered with the High Court of Malaya. Pursuant to the Powers of Attorney Act 1949, in order for the power of attorney to be effective, a copy of it must be deposited with a High Court in Malaysia.
How to Revoke a Power of Attorney
You can revoke a POA any time if you have the legal mental capacity.
You must file the original and a copy of the Deed of Revocation together with the original POA at the High Court where the POA was registered.
Execute three copies of the Deed of Revocation, and the required authentication clause. The execution and authentication procedures for revocation are the same as the original POA as outlined above.
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