Selecting a Power of Attorney requires a significant level of trust since choosing someone as your legal Agent is risky. Whoever you name as your Power of Attorney legally replaces you. In the same way, you could, and if you were physically present, you are granting that individual the authority to act on your behalf. Specific actions that they make may have legal ramifications for you.
For these reasons, it’s crucial to ensure you are familiar with the Power of Attorney document’s provisions and that the person you are granting Power of Attorney to is dependable, trustworthy, and has the requisite training, expertise, and experience to act on your behalf. Do not cut corners or designate someone as your power of attorney because they are less expensive; this is not the most incredible method to guarantee that your interests are completely safeguarded.
What is Power of Attorney?
A Power of Attorney (POA) is a legal instrument that gives a specified individual the authority to handle affairs about your assets and company on your behalf. In both corporate and private affairs, a power of attorney is the most typical legal instrument that one may possess in Dubai.
Who Has the Authority to Grant Powers of Attorney, and who may Exercise Such Powers?
As long as they are of the proper legal age and mental competence, anybody may provide power of attorney to another person. Like a Power of Attorney, anybody who satisfies these criteria and has the legal competence to act as needed may be nominated.
What are the risks of giving power of attorney ?
When someone grants power of attorney to another person, they allow that individual to act entirely on behalf of the Principal. In other words, the Agent would have the complete legal authority to act on behalf of the Principal, and their activities would be regarded as the Principal’s actions.
The maxim “Qui facit via alium facit per se”—literally translates to “He who acts through another performs the deed himself”—is the foundation for this idea. By granting someone power of attorney, the Principal would become liable for the actions of his Agent. There are certain risks of giving Power of Attorney if is not provided correctly. This power may be very easily abused for one’s benefit. Before granting someone power of attorney, one must give it much thought. It is because by designating someone as their Agent, a person is essentially delegating decision-making authority to the Agent.
For instance, when the donee uses the donor’s funds without their consent to further their interests rather than the donor’s. A power of attorney holds the donor responsible for the donee’s actions in adequately executing the purpose. Fraud done by an agent while carrying out a task is thus similar to fraud committed by his Principal. To sum up, we may say that a person must choose his donee or Agent extremely carefully.
Read more about: Power Of Attorney Abuse
Risks of Giving Power of Attorney
The kind of POA and conditions you accept while signing the agreement will determine the risks you face as an agent. As an agent, you should be aware of the following substantial dangers, which pertain to the majority of POAs, if not all of them:
Making Decisions and Financial Choices with Your Responsibility
Although the majority of general POAs shield you from general, legal and financial obligations, it is nevertheless possible to unintentionally place yourself in a position of liability when acting in the grantor’s name in particular transactions or choices. The bottom lesson is that you should always consult a lawyer at Notary Public before signing any documentation or promises that someone asks you to sign in your capacity as the POA. You may be putting yourself in a financial bind.
Legal or Financial Responsibility
Giving a spouse POA concerning your personal affairs is typically inappropriate since it might have a negative financial and legal impact on them if they need to exercise that POA. Assume you insist on naming your spouse or a close relative as your POA agent. In such instances, a limited or special power of attorney, rather than a general power of attorney, is advised.
It is better to establish that restricted power of attorney to prevent this responsibility. If possible, consider establishing a trust for your assets and property to be administered by a third party rather than granting a POA to a spouse or close family member.
Mismanagement of a Grantor’s Finances and Property
Agents of a POA may sometimes create legal and financial havoc, either through intentional purpose or blissful ignorance. Suppose the provisions of the POA are extensive (as with a general POA). In that case, the Agent may purchase and sell the property at a loss, mismanage a company into bankruptcy, or inadvertently create the impression of theft or embezzlement.
You should know: Biggest Misconceptions About Powers Of Attorney
In the UAE, what may an agent do with a Power Of Attorney?
According to the law, agents or authorized individuals who are POAs have a fiduciary responsibility to act in the principals’ best interests while making financial choices.
Powers of attorney and other legal agreements do not fully confer rights to the Principal’s assets. Even though a principal claims that an agent has the right, it does not always follow the fiduciary duties. The fiduciary conditions will determine the right to act. Although the Agent can act, the Agent does not have the right to act if the activity is not in the Principal’s best interests.
How may Notary Public Dubai assist you?
A power of attorney may be misused in several ways, which can significantly affect the Principal’s finances. There are situations when the harm has already been done, and the victim is unaware of it. The holder of a power of attorney is given control over your finances and property when you grant one. If you learn that the Agent is abusing the authority given to him, you should immediately withdraw that authority.
You should also seek legal counsel at Notary Public Dubai and the assistance of government agencies and the court to help you recover your assets, money, and property.
Syed Hassan Ali has an experience of 13 years and is highly specialized in providing legal consulting for all types of notary requirements. By utilizing his diverse and deep knowledge, he has consistently aided individuals and organizations in finding flexible and timely solutions.