Having a power of attorney in Malaysia allows you to give someone you trust the power to make important decisions on your behalf.
This article explains the benefit of having a power of attorney, and how to create it and revoke it.
Understanding Power of Attorney Malaysia
Power of attorney Malaysia (‘POA’) is a legal document created in accordance with and under the law, that is the Powers of Attorney Act 1949. It allows the donor, also known as the ‘principal’, to give powers and authority to the attorney, sometimes known as ‘donee’ to act on behalf of him the subject stated in the instrument.
For simplicity, we will refer to both of them as principal and attorney in this article. The donor can be a corporation donor or individual donor.
The effect is like appointing an agent/agency to act on behalf of the related dealings. This document is slightly different from a trust deed in Malaysia, as although both are used for estate planning in Malaysia and involve giving powers to act on behalf, a trust deed usually involves the transfer of properties, which may not be the case for power of attorney.
Benefits and Duties of Principal
Some of the benefits of having a power of attorney in Malaysia include:
Convenience
If someone is constantly abroad, then giving others certain powers in dealings, such as making full payment in business and personal matters, ensures things can run smoothly.
Unforeseen circumstances
If someone falls sick and worries that he may be of unsound mind and not be able to take care of his matters in the future, then appointing someone to act on his behalf helps to provide relief to him.
When an attorney is appointed as a representative, he has several duties, such as:
Acting in principle and for the best interests of the principal, exercising certain powers granted by the power of attorney.
Keep accurate records of all transactions made under the attorney’s authority. This ensures proper documentation and valid exercise of power.
Steps For Creating Power of Attorney
The process of creating a power of attorney in Malaysia follows below steps:
Step 1: Decide on the extent of powers, duration, and revocability
Here, the principal will have to decide on 2 matters: the extent of powers, duration, and revocability.
Extent of powers: The principal will have to decide whether it is for a general or specific purpose:
(a) General purpose
It gives the attorney-wide permission and general power to act on behalf of the principal in many different areas, such as business activities, financial decisions, banking, and related areas. In essence, it is suitable when the principal can't decide instantly and trusts the attorney to give him broad authority to decide for him in broad matters.
(b) Specific purpose
This is suitable when requiring someone to act on behalf of a certain transaction and granting special power for that purpose. For example, it could be a transaction for selling properties and the attorney can receive payment, sign documents, and do other related purposes.
Duration and revocability: Here, the principal can decide on the duration and revocability which are divided into 3 types:
(a) 1st type: Revocable power of attorney
Both the principal and attorney may revoke this type by each giving written notice of renunciation. Thus, this power of attorney will continue to be in force until revoked by either party.
(b) 2nd type: Irrevocable power of attorney for a fixed time
This is an irrevocable power of attorney that continues to be in force for a fixed time and can be created with or without consideration. ‘Consideration’ means, in layman's terms, an exchange of value between parties, which can be money or others.
During the fixed time, the parties cannot revoke the documents even with the principal's death, marriage, mental disorder, unsound mind, or bankruptcy. However, the principal can only revoke it with the consent/concurrence of the attorney.
(c) 3rd type: Irrevocable power of attorney
This is an irrevocable power of attorney in Malaysia with enduring power that must be created with valuable consideration. It cannot be revoked despite the death, marriage, mental disorder, unsoundness of mind, or bankruptcy of the principal, except with the consent of the attorney.
As to whether to opt for revocable or irrevocable power of attorney, it depends on each situation and the needs.
Step 2: Choosing Someone Fit to be an Attorney
Once you have decided on the extent of powers, duration, and revocability, then you can choose a qualified person who you trust to be your attorney. You can choose someone you know personally, such as of family relation and in an ideal case, don’t have any personal interest in the subject matter so he can act impartially.
Step 3: Prepare the Document
The document should state:
Important terms such as the intention and purpose of the principal in making the document,
Scope of powers granted in favour of—whether for specific power or general power and whether there is any exception to the certain powers granted.
Duration and its revocability: whether revocable or irrevocable.
It should be written in the national language (Bahasa Malaysia), or English language. If it is in another language other than Bahasa Malaysia or English, then it requires a translation of the document by someone qualified to translate which has to be verified by a statutory declaration with the deposition that the translation is, to the best of his knowledge and belief, a true translation.
The other legal requirements are execution and authentication, whereby the principal has to sign the document in front of the following persons in the case of Peninsular/West Malaysia:
Magistrate,
Notary public
Commissioner for oaths
Advocate and solicitor (lawyer)
Justice of the peace
Land Administrator
And other authorised people.
Thereunder, the process continues with the power of attorney registration by the principal or his lawyer depositing an office copy of the instrument compared with the original and then marked by the Senior Assistant Registrar of the High Court of Malaya in Kuala Lumpur with the words "true copy" in the office of the Senior Assistant Registrar of the High Court.
With this, the process for creating power of attorney is complete. Furthermore, the related rules when it comes to filing the documents in the court is the Rules of Court 2012. There is rarely any power of attorney Malaysia sample as it is a private and confidential document.
Revocation of Power of Attorney
After the document is duly registered with the High Court and if the parties intend for renunciation and revocation of the attorney, then they can deposit the notice of revocation and consent (if required) with the registration office of the High Court, as required under Section 5 of the Powers of Attorney Act 1949.
Apart from that, the High Court also grants a grant of probate, a legal document to administer the deceased’s estate when there is a will. It is important to ensure the procedure is followed to ensure there is no unlawful revocation of the document.
Tips For Creating the Instrument
Here are some tips you can bear in mind:
Engage a lawyer to prepare those instruments
They can provide you with legal advice and help you prepare the document. This helps when there are complicated situations, for instance, the bankruptcy of the parties.
Ensure the instrument complies with the laws.
This is important when there is dealing with the property. When a document is presented to the land office together with the valid power of attorney for the transfer of property, then the land registry will have notice that the instrument is in force and that the attorney has the power to act on that said property.
This ensures the smoothness and validity of the transfer. If the instrument does not comply with the law, then it is a void instrument where the other person, as buyer/plaintiff can initiate legal proceeding against the vendor/seller seeking compensation.
A further complication arises, for instance, when there is a charge on the property or when the court makes an order in that case against the seller and there is an appeal to the higher authority.
Conclusion
A power of attorney in Malaysia is a legal document that allows one to act on his behalf. If you need any legal guidance on any legal matters, do contact us today and we will assist you.
Frequently Asked Questions
1. How to obtain power of attorney in Malaysia?
To obtain a power of attorney, first, you must identify the person you want to name as the attorney. This person can be a family member, friend, or anyone you trust.
Next, you must prepare a document stating the powers you are granting with the duration and revocability. Then the document should be executed, authenticated, and then deposited with the High Court of Malaya.
2. What is the legal effect of a power of attorney?
A power of attorney is a legal document that authorises someone else to act on your behalf in specific or general matters. The action of the representative is as valid as if it is done by the principal himself.
3. What is the function of a power of attorney?
The function of a power of attorney is that it allows one person, called the "principal," to give another person, called the "attorney," certain powers to act on his behalf in respect of certain situations.
4. Does Malaysia have lasting power of attorney?
Yes, in fact irrevocable power of attorney in Malaysia has enduring power until it is legally revoked.
