A power of attorney (POA) is a legal document that grants an individual, known as the attorney-in-fact or agent, the authority to act on behalf of another person, called the principal. This document’s importance cannot be overstated, particularly when you may become incapacitated or unable to decide for yourself. In Dubai, understanding the local legal context is essential when creating a POA, as regulations can differ significantly from other jurisdictions in the UAE. this blog discusses how to avoid mistakes in the power of attorney drafting.

Common Mistakes in Power of Attorney

Several risks can lead to serious consequences when drafting a power of attorney. Let us look at some common mistakes to avoid in power of attorney:

1. Lack of Clarity in Scope and Powers

One of the most frequent power of attorney drafting errors is failing to clearly define the scope of authority granted. Vague language can lead to confusion and potential misuse of power. To avoid this:

• Be specific about what decisions the attorney-in-fact can make on your behalf.
• Clearly outline any limitations or restrictions on their authority.
• Use precise language to describe financial, medical, or personal care decisions they can make.
• make your PoA as detailed as possible to make sure there is no ambiguity.

For example, instead of saying “manage my finances,” specify “authority to pay bills, make deposits, and manage investment accounts, but not to sell real estate or take out loans.”

2. Not Complying with Local Legal Requirements

Each jurisdiction has its own rules for creating a valid POA. In Dubai, failure to adhere to local legal standards can render your document ineffective. To ensure compliance:

• Research UAE-specific requirements or consult with a local legal expert.
• Ensure the document is properly witnessed and notarized according to Dubai law.
• Consider having the POA translated into Arabic, as this may be required for certain transactions.
  

3. Choosing the Wrong Attorney-in-Fact

Your chosen representative should be trustworthy, competent, and willing to take on the responsibility. Selecting someone unsuitable for the role is a critical mistake that can have far-damaging consequences. Consider:

• The person’s reliability and integrity
• Their financial smartness if they’ll be handling monetary matters
• Their ability to make difficult decisions under pressure
• Their willingness to act in your best interests, even if it conflicts with family members’ wishes
  

4. Failure to Include a Revocation Clause

Always include a clause that allows you to revoke the POA if needed. This gives you control and flexibility should circumstances change. The clause should:

• Clearly state the conditions under which the POA can be revoked
• Outline the process for revocation
• Specify how the attorney-in-fact will be notified of the revocation
  

5. Not Updating the Document

Life changes, and so should your POA. Failing to review and update your document regularly is a common oversight that can lead to outdated and potentially harmful instructions. Consider reviewing your POA:

• Annually
• After major life events (marriage, divorce, birth of children)
• When your financial situation changes significantly
• If your chosen attorney-in-fact becomes unable or unwilling to serve

6.Ignoring Financial Implications and Responsibilities

POAs often involve financial decision-making. Overlooking the potential fiscal impacts or not setting clear guidelines for financial management can lead to serious issues down the line. Address the following in your PoA:

• Specific financial powers granted (e.g., ability to sell property, manage investments)
• Limits on gifting or transferring assets
• Requirements for record-keeping and reporting to family members
• Compensation for the attorney-in-fact, if any

Tips for Drafting a Power of Attorney in Dubai:

1. Seek professional legal advice familiar with UAE law. Dubai’s legal system is based on both civil law and Sharia law, making it unique and complex.
2. Be specific about the powers granted. UAE law recognizes different types of POAs, including general, special, and limited. State which type you’re creating and the exact powers it confers.
3. Consider having the document notarized and translated. Many official transactions in Dubai require notarized and Arabic-translated documents.
4. Keep copies in secure locations and inform relevant parties. Ensure your attorney-in-fact has access to the document when needed.
5. Familiarize yourself with local customs and business practices. In Dubai, personal relationships often play a significant role in business dealings, which may affect how your POA is used.

Conclusion:

Avoiding power of attorney drafting errors is necessary for protecting your interests and ensuring your wishes are carried out effectively. By understanding common risks and taking careful steps in the drafting process, you can create an effective POA that serves its intended purpose, especially within the specific legal framework of Dubai, UAE.

Remember, a well-drafted POA provides peace of mind and ensures that your affairs are managed according to your wishes, even if you’re unable to manage them yourself. Take the time to create this document thoughtfully, and don’t hesitate to seek professional assistance to navigate the complexities of UAE law.

Frequently Asked Questions

1. How often should I update my power of attorney?

Review your POA annually and after any significant life changes.

2. Can I have multiple POAs for different purposes?

Yes, you can create separate POAs for financial, medical, and personal matters.

3. What’s the difference between a general and a limited POA?

A general POA grants broad powers, while a limited POA restricts authority to specific tasks or periods.

4. How do I revoke a power of attorney in Dubai?

Typically, you must notify your attorney-in-fact in writing and file the revocation with the same authorities that processed the original POA.