Power of Attorney in South Africa: What does it entail?

Power of Attorney in South Africa: What does it entail?

What is a power of attorney?

In terms of our law, a person may not act on behalf of another unless authorized to do so. As such, a power of attorney is a formal instrument by which authority is conferred from the “principal” (the person giving the authority to act on his/her behalf) to an “agent” (the person acting on behalf of the principal).

When will you need a power of attorney & who can be appointed as an agent?

Whether due to old age or for reasons of practicality, it is often necessary for someone to entrust the management of their affairs and property to another person.

However, it is essential that the principal has contractual capacity at the time of signing the power of attorney. Therefore, a person who has already been declared mentally incapable does not have the contractual capacity to grant someone the power to conclude juristic acts on his/her behalf. Similarly, the agent is also required to have contractual capacity to conclude juristic acts, as the lack of such capacity would prevent him/her from being able to conclude juristic acts on behalf of the principal.

Although agents are frequently referred to as ‘attorneys’ , it is not only lawyers who may be conferred authority in terms of a power of attorney. Any person over the age of 18 can be granted power of attorney by the principal, provided that the agent is both competent and trustworthy to make financial and legal decisions. For example, an aging parent may entrust the management of his affairs to his child.

What powers can be conferred by a power of attorney?

The powers which are conferred by a power of attorney can either be general or special. In terms of a general power of attorney, a principal would be able to authorize the agent to conduct his/her business or manage his/her affairs without reservation, or to perform a wide range of acts, as set out in the power of attorney.

In terms of special power of attorney, a person would be authorized to perform a specific act, such as; signing a sale agreement or opening a bank account.

It is important to note, that the authority of the agent is embodied in a power of attorney, whether it be a general or specific. In other words, it is the formal document which determines the scope and extent of the agent’s authorization. Thus, an agent’s authority is restricted to those powers which are conferred by the power of attorney, and incidental to the performance thereof.

What are the prescribed formalities?

A power of attorney can be granted informally, and even verbally, as there are no general prescribed formalities with which it needs to comply. However, when a power of attorney is required for a specific purpose, certain formalities are prescribed. For example, in terms of Section 95 of the Deeds Registries Act “a power of attorney authorizing the performance of certain acts in a deeds registry must be attested by two competent witnesses, a magistrate, justice of the peace, commissioner of oaths or notary public”

When does a power of attorney lapse?

The requirement that a principal must have contractual capacity at the time when authority is granted to the agent, has the implication that should the status of the principal change with regards to the power to conclude juristic acts, the authority conferred upon the agent will lapse. Therefore, a power of attorney conferred by your parent would terminate should your parent become incapable of managing their own affairs. In terms of our law, a curator would need to be appointed by a court to administer the affairs of a person with diminished mental capacity.

Similarly, a power of attorney granted by a person during their lifetime, will become null and void upon their death. If your father appointed you as his agent while he was alive, you may have been legally entitled to pay his bills or manage his investments, however, upon his death you will no longer be entitled to do so.  It is only a lawfully appointed executor who is permitted to deal with the estate of a deceased person.

At Pagdens Attorneys we assist individuals with drafting general and special power of attorneys, the administration of deceased estates and the appointment of a curators. Should you require any such assistance, please do not hesitate to contact us at info@pagdens.co.za or 041 502 7200.

This article is for general information should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact an attorney for specific and detailed advice. Errors and omissions excepted (E&OE)