The Paper That Stops Working When You Need It Most

Ask most NRI families whether they have a Power of Attorney sorted for their parents and the answer is a relieved yes. A cousin has one for the bank. An uncle signed something years ago for the flat. It sits in a folder, and the folder is a kind of comfort: if something happens, someone local can act. Very few of us have ever read what that paper actually allows, or thought about when it stops working.

A Power of Attorney is simply a document in which one person (the principal, usually your parent) authorises another (the agent, often a sibling, a relative, or you) to act on their behalf. A General Power of Attorney gives broad authority across many matters: bank accounts, rent, tax filings, dealing with offices. A Special Power of Attorney is limited to named tasks, such as operating one account or handling one property. Both are useful tools. But neither does everything families quietly assume it does.

It isn't built for a loss of capacity. This is the limit almost nobody knows about. Under Indian agency law, a Power of Attorney is generally tied to the principal's capacity: Section 201 of the Indian Contract Act provides that an agency is terminated when the principal "becomes of unsound mind," subject to exceptions recognised by law. India does not have a general statutory equivalent of the durable or lasting Power of Attorney used in the UK and some US states, which is specifically designed to keep operating after the person who signed it loses capacity. Dementia is one reason this becomes a real issue, but a diagnosis by itself does not answer the legal question; a person in the earlier stages may still be capable of many decisions. The important point is that a standard PoA should not be treated as a general solution for managing a parent's affairs once they no longer have the decision-making capacity the law requires. When that happens, families often face a slow, stressful court process to have someone appointed to act.

It is not a medical decision-maker. A PoA drafted to handle property, banking or administrative affairs should not be assumed to give the holder a general authority to make healthcare or end-of-life decisions. In practice, hospitals in India turn to close family for consent. For decisions about refusing or withdrawing life-sustaining treatment, in the circumstances recognised by the Supreme Court, the relevant instrument is an Advance Medical Directive, commonly called a living will, under the Court's 2018 Common Cause judgment. In January 2023 the Court made the procedure more workable: it is now signed in the presence of two attesting witnesses and attested before a notary or gazetted officer, instead of the earlier Judicial Magistrate requirement. It applies to a narrow situation (terminal illness or a state with no realistic hope of recovery, when your parent cannot speak for themselves), and it lets them name the person they trust to speak for them. It is a separate document, for a separate job, and not a general medical power of attorney.

It does not transfer property by itself. A Power of Attorney lets someone act; it does not transfer ownership. The Supreme Court has repeatedly held this, most notably in Suraj Lamp & Industries v. State of Haryana (2011): a GPA is not a conveyance of title, and a "GPA sale" is not a valid substitute for a registered sale deed. An agent can sign a sale deed on your parent's behalf only if the Power of Attorney specifically authorises it, and the deed itself must still be properly registered, subject to the applicable registration and other legal requirements.

None of this is a reason to panic. It is a reason to open the folder. The families who get caught out are rarely the ones without paperwork. They are the ones whose paperwork was written for a different problem, and who find out in a hospital corridor or a bank manager's office that the document they were relying on doesn't cover the moment they are in.

And there is a practical truth underneath all of it: these documents depend on your parent having the legal capacity to understand what they are signing and to sign it voluntarily. If capacity is already in question, getting advice sooner rather than later matters.