Background to a power of attorney

Power of Attorney (POA) refers to a legal authorization that gives a designated person, widely referred to as the agent, the legal capacity to make decisions and take actions for someone else, widely referred to as the principle.

A POA is not a contract, but rather a declaration by the principle that the agent shall have the power to act and decide on their behalf.

A Power of Attorney does not necessarily mean that a person is unable to make decisions, it just means that certain circumstances or specific reasons compel them to make use of an agent to get things done.

The power of attorney enables the agent to perform various legal and financial activities on behalf of the principle, such as entering into contracts, buying, selling, mortgaging and managing properties, etc.

There are two categories of powers of attorney, namely general power of attorney and special power of attorney. A general power of attorney allows an agent to perform a collection of specified acts on behalf of the principle, and unless the principle specified a determinable term for the validity of the power of attorney in the document, it normally only terminates on the death, insolvency or mental incapacity of the principle. A special power of attorney limits the agent’s powers to perform a specific act that the principle specifically identified. Once the specific act has been successfully executed, the POA lapses.

Requirements for a power of attorney to be valid

• A POA has to be reduced to writing and be signed by both the principle and the agent. The POA must clearly describe and identify the principle and agent as well as the extent of the powers granted to the agent.
• Although it is not specified in South African law, it is common practice to have the POA witnessed by two witnesses (the witnesses are not allowed to gain any benefit from the POA), be above the age of 14 and are capable of giving evidence in court. The exceptions to the two witness rule is where the power of attorney is signed either before a Commissioner of Oaths, a Magistrate or a Notary.
• Concerning property transactions, the originally signed power of attorney, accompanied by the relevant documents, must be registered in the Deeds Office, under the Deeds Registries Act 47 of 1937.
• Powers of Attorney executed outside South Africa for use in South Africa must be executed in the presence of a notary public. Depending in which country it is executed, it must also be sufficiently authenticated.


Termination of a Power of Attorney

A principle can cancel his or her own power of attorney at any time. Furthermore, a POA will automatically terminate when the principle:

• Dies
• Becomes insolvent and his estate is sequestrated
• Becomes mentally impaired, no longer able to manage his or her affairs, and make his or her own decisions

When a power of attorney lapses as a result of one of the above, it becomes void and the agent no longer has the power to act on the principle’s behalf. Should an agent act on the authority of a lapsed power of attorney, they may become personally liable for any damages suffered, as they have no legal authority to act.

What are the options when a power of attorney becomes invalid because of the principle’s mental incapacity?

If it is suspected that a person is losing mental capacity to make sound decisions and take care of his own well-being, an application can be made to the High Court to have a curator appointed.

This process involves medical and mental assessments by specialized health professionals who will then compile a report for the court’s consideration. If all the requirements are met, the court may appoint a curator bonis. This is normally a legal representative that will be tasked to manage the finances, property and the estate of the patient.

Under more severe circumstances the court may also appoint a curator ad personam who will take on the responsibility of looking after the patient’s physical welfare such as his accommodation, health and day to day care.

DISCLAIMER: THIS ARTICLE IS WRITTEN FOR INFORMATIONAL PURPOSES ONLY. IT SHOULD NOT BE INTERPRETED AS LEGAL OR FINANCIAL ADVICE