There are many decisions that need to be made in life which, although unpleasant to think about, can profoundly affect the financial security of you and your family. It is wise to take a proactive approach with regard to subjects like preparing a will and taking out life insurance. A ‘Power of Attorney’ stating who makes your decisions should you become disabled or incapacitated is yet another important aspect to consider.
But that isn’t all that it is worth. In the UAE, given its emergence as a global business hub and the sheer number of transactions that take place here, a power of attorney has also become one of the most relied upon documents in trade dealings. This valuable tool helps manage affairs from anywhere in the world and is extremely beneficial both in terms of its practicality and the peace of mind it affords.
We address the essential questions related to setting up a power of attorney specific to your requirements in the UAE.
What is a Power of Attorney and Why Do You Need One?
A power of attorney is a document signed before a Notary Public by you, the principal, that gives another individual, an agent, the right to carry out legal transactions at your behest. The agent will provisionally manage your affairs in your absence, should you become physically or mentally compromised or incapacitated or land in a situation where you are limited to act on your own behalf.
Depending on the scope of your power of attorney, the agent can be a relative, friend, business partner, employee or even your lawyer.
A power of attorney is an extremely powerful document. It is essential that you choose a trusted agent who you are confident will act in your best interest. Additionally, the UAE law requires your agent to be over 21 years of age and of sound mind.
[Related: The what and why of writing a will in Dubai]
Understanding the Types of Power of Attorney
Based on the scope of authority, an individual can employ one of the following two types of power of attorneys authorized by the government in the UAE.
- General Power of Attorney
This is the broadest type of authorization that permits an agent to conduct almost all kinds of dealings or transactions on behalf the principal. The responsibilities of the agent include, but are not limited to, representing the principal in all real estate dealings, legal issues, before the ministries, government departments and utility and telecom service providers, settling bills and claims, signing contracts and other documents and the like.
A general power of attorney ceases to be valid the moment the principal dies, becomes incapacitated or when the power of attorney is rescinded.
- Limited Power of Attorney
Also known as special power of attorney, this is limited to specific legal acts or one-time transactions. This type of power of attorney specifies the transactions that an agent is authorized to undertake on behalf of the principal. Limited power of attorney typically includes sale or purchase of real estate, legal entities, shares or vehicles. In all cases, the details of the entire transaction need to be outlined in the document.
The Process of Setting Up a Power of Attorney in the UAE
The UAE law requires the power of attorney to be prepared in Arabic with an English translation provided for the convenience of non-Arabs. It is followed by notarization and signing of three copies of the document at the Notary Public’s office. Two original copies are returned to the principal while one is held by the notary public for certifying and record-keeping.
It should be noted that different power of attorneys may have different or additional requirements. A limited power of attorney for the sale of a vehicle, for example, will require the car registration papers to be submitted at the time of attestation.