Business owners/ individuals should consider a lasting power of attorney to make any document legal. It saves you business, and other important affairs when you are not able to manage them on your own.
What’s a Lasting POA?
A power of attorney allows a person to appoint another person, to act on behalf allowing to take important decisions. To give an example, it is a common practice for a property or real estate transaction involving a POA to a real estate agent in order to act on the behalf of a buyer or homeowner in signing documents that are related to the transaction.
According to Article 951 of the CTA
A POA may be canceled under the following situations.
- When the Assignee is dead.
- When the POA is revoked.
- Mental incapacity of the principal
- End of the some specific Transaction
A lasting POA allows continuity of the authority even with the mental incompetence of the principal. Mental incompetence is the situation when a person is unable to make important personal or business decisions. For instance, dementia can be an acceptable reason for mental incompetence. Lasting power of attorney can be created for several reasons. You can create as many lasting POAs as long as the documents don’t overlap.
Also Read: Durable Power Of Attorney FAQs
When Does a Lasting POA Take into Effect?
There are two kinds of lasting POAs. They are:-
- Springing Lasting POA: it becomes effective only when the principal becomes incapacitated.
- Regular Lasting POA: It becomes effective instantly with the signature and notarization of the legal document.
Take note: a POA notarization in UAE is required. Of course, an agent does have power or authority even when the principal becomes incompetent.
What Should Business Owners Know About Lasting POA?
Business owners in UAE may need the lasting power of attorneys to assign the people to handle the business activities when they are not able to do so. The creation of a limited lasting POA for your business’ legal and financial matters can save your business when you become incapacitated.
For instance, if you have sole ownership of an LLC in Dubai, a lasting POA will provide a specific agent that you have chosen yourself the ability in handling the business’ daily operations and activities in your stead.
Remember that you have to exclude business affairs with other lasting POAs that you create.
What Should a Lasting POA Include?
Here are some sections that have to be in a lasting POA:
- List all the specific descriptions of the parties that are involved with the power of attorney. There should be complete information on the agent and the principal to avoid the confusion. Also include the relationship between principal and the chosen agent.
- There should be limits that are described in the POA. The limits should be with respect to time or the kind of POA, whichever applies. This is the one play where a principal is able to be specific on whether a POA is for every single matter that is concerning the principal, for medical matters, or for business matters only. A POA should also be the place in which the principal states that the POA doesn’t include specifically.
- There should be a statement saying that if your situation mentally changes, or when you become competent back again e.g. following recovery from major injury, then the POA expires.
- Include the instructions for the agent. It may include the details of the consulting person for medical and business matters. Be careful with the medical lasting POA as it shouldn’t be contradictory to your living will.
- Signature in front of the witnesses.