A power of attorney for financial purposes is a written legal document that provides the assigned or authorized person legal authority in acting for the person assigning the power. A POA specifically for financial purposes allows the agent to have authority for the following tasks on the principal’s (person assigning authority) behalf: writing cheques, conducting financial transactions, implementing new investments, and opening bank accounts.
A POA can offer another person the authority in selling the real property of another person, file a lawsuit, and receive a variety of forms of income for the principal. The legal authority may be important for planning for the future as the principal does not have to be present to conduct financial transactions or make financial decisions in the event that he or she can’t do so whether permanently or temporarily.
A POA that falls in malicious persons often results in the predators transferring assets, stealing money, and/or taking adverse acts that are against the principal.
Take note: a financial POA may bypass the safeguards that banks and other financial institutions implement in order to provide sufficient protection to their clients.
In some Power of Attorney Abuse cases, the principal may be suffering from a specific type of disease or health crisis, so he or she chooses to have an agent assigned in carrying forth transactions in his or her place while in the hospital. Unfortunately, this is the best time for a predator to take advantage of a rare opportunity, closing accounts and withdrawing funds without the knowledge or approval of the principal.
The abuser of the power of attorney may even transfer real estate properties to another name, remove the belongings of the principal, use the money of the principal, and take advantage in other ways.
There are several different legal claims that may arise in this context. It’s often essential to act swiftly to preserve the rights of the principal and mitigate the consequences financially.
Some of the legal claims that exist when POAs for finance are being abused are the following:
A POA designation makes a fiduciary relationship that is between the agent and the principal. In this situation, the principal is owed by the agent the duty in acting with diligence, conscientiousness, and utmost care. The agent owes loyalty onto the principal, only acting in the best interests of the person assigning authority.
UAE legislation establishes various duties authorized persons in POAs owe to principals, including the right in keeping principals involved of all financial transactions that can affect them. Notification for any self-dealing as well as depriving personal benefits from transactions is included as well. If agents violate these duties, principals may file a lawsuit that is based on a breach of fiduciary duty.
Another possible claim a principal can make legally is conversion. With this claim, it asserts an authorized person stole form the principal. Litigating this kind of case successfully typically requires evidence that the agent has used the property of the principal in a manner that is not consistent with the agent’s rights of ownership. In addition, the principal can demand the agent to return the property. If the agent has refused in returning the stolen property, then the case may be filed.
In most cases, a legal claim is filed that the agent has lied regarding circumstances that caused the actions that are against or adverse to the best interests of the principal.
In the United Arab Emirates, there is legislation regarding elder abuse, including about taking advantage financially of an elder who is vulnerable. Civil or criminal laws have varying penalties and degrees and can result in the charge of a felony for the abuser.
The principal is legally able to receive compensation from damages will depend on a couple of factors, including the law that is applicable, the conduct of the agent, and the value of the stolen property.
An individual that believes a power of attorney has been abused, which may or may not be a family member or relative, can discuss concerns regarding the case with lawyers. An experienced lawyer in Dubai can revoke a power of attorney that’s been abused, so no further damage will occur to all parties involved. A lawyer can help in demanding the return of a stolen asset and filing a lawsuit, alleging an appropriate course of action that is against the POA abuser. A lawyer may even request to have the actions of the agent audited and for financial transactions to undergo accounting.
If you are in Dubai or anywhere in the United Arab Emirates, we suggest you consult with our legal consultants. Our legal team has decades of experience helping clients deal with the abuse of POAs. Call us today for an initial consultation with our team of experts.
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Hassan Humaid Al Suwaidi is a UAE Citizen and the founder of the firm HHS Lawyers. He has a vast experience of 20 years of dealing with high-value and complex notary requirements. Hassan has been involved in some of the largest legal settlements in the UAE and is commended for his ability to attain the most favourable outcomes for his clients.