In South Africa, a power of attorney is a legal document that allows one person (referred to as “the principal”) to appoint another person (referred to as “the agent” or “the attorney”) to act on their behalf in specified legal, financial, or sometimes even personal matters. It essentially grants the agent the legal authority to make decisions and take actions as if they were the principal. It is important to note that all decisions will bind the principal himself, and not the agent.
There are generally two main types of powers of attorney:
- General power of attorney: grants broad authority to the agent to manage various aspects of the principal’s affairs, such as managing bank accounts, handling real estate transactions, managing investments, and signing contracts.
- Special power of attorney: limits the agent’s authority to specific tasks or transactions, for example, selling a particular property or signing a single contract.
What is important to keep in mind is that South African law does not recognise an “enduring” power of attorney. This means that a Power of Attorney automatically becomes invalid if the principal loses mental capacity (e.g., due to dementia, a stroke, severe illness, or death). Powers of attorney can’t be relied on after the principal passes away.
The principal must sign the power of attorney and must be of sound mind and have full contractual capacity when granting the power of attorney. This means they must understand the nature and consequences of granting the authority to the agent. If the principal is mentally incapacitated at the time of signing, the power of attorney is invalid.
Generally, the principal’s signature must be witnessed by two competent individuals who are not the agent and who are over the age of 14 and capable of giving evidence in court.
When would you use a power of attorney?
A suitable scenario for using a power of attorney in South Africa would be when an individual is travelling overseas for an extended period and needs someone to manage their affairs back home (i.e. a general power of attorney), or to sign specific documents on their behalf (i.e. a special power of attorney). Another scenario for using a power of attorney would be when an elderly person wants to give a trusted financial advisor permission to manage their investments on their behalf. The financial advisor’s powers would be set out in the special power of attorney.
The process, the timeline, and the costs
As a power of attorney is just a legal document that formally grants authority from the principal to the agent, a general power of attorney can be drawn up within a relatively short period of time, perhaps an hour or less.
If a special power of attorney is needed, the attorney will most certainly want to consult with the principal to understand how broad the authority must be which is given to the agent. Drawing up the special power of attorney might then take a bit longer.
The cost to draw up a power of attorney in South Africa can vary, and depends on how much detail has to go into the document.
- Online Templates/DIY: You can find a general power of attorney template online for a very low cost, sometimes as little as R100.00. These are for those who prefer to draft the document and add in the specific details themselves.
- Law Firms (General Power of Attorney): For a general power of attorney drafted by a law firm, you can generally expect to pay in the range of between R900 to R2,000.
- Law Firms (Special Power of Attorney): If you require a more complex or specialized power of attorney, or need legal advice beyond a simple draft, the cost will depend on the lawyer’s hourly rate. These rates can vary significantly based on experience, location, and the complexity of the matter and could range from R1,000 an hour to R5,000 an hour or more.
We always suggest that people take legal advice on your particular circumstances before signing any power of attorney.
