Home>Benefits Vs. Risks of Giving a Power of Attorney

Benefits Vs. Risks of Giving a Power of Attorney

A Power of Attorney is a legal document in which one person gives another person, the agent, the right to perform certain tasks or make decisions on his or her behalf.


A Power of Attorney can be as broad or narrow as the principal makes it. He can give general powers or restrict the powers to limited actions. Some of the powers include operating the person’s business, real estate, investment, banking, property gift transactions or filing a lawsuit on behalf of the principal. When a general POA is given, the person can make decisions to the same extent that the principal would be able to. However, for certain transactions such as property selling or banking matters, a specific POA might be required in some jurisdictions (e.g. in Dubai). You can also limit the validity of your POA to a certain period, for instance, when you plan to be out of the country.


A Power of Attorney is a convenient way to have a person’s affairs tended to without personal presence. A POA may also serve as a convenient tool if you appoint a person or a company that is experienced and knowledgeable in a relevant field. For instance, you may want to give powers to an expert or a lawyer to sell or purchase a property on your behalf, if you are not sure how to do it yourself.

A Power of Attorney is often used as an estate planning tool as well. For instance, it can become an important legal instrument to keep things going if a person incapacitates. It also ensures that the person giving the POA decides who will make decisions in the event of his or her incapacitation and how his or her matters are handled.

So, a Power of Attorney would be of particular interest and benefit to you, if

  • you are not able to attend formalities to compete a transaction;
  • you are looking to save travelling expenses and time required to seal a deal;
  • you want to authorize a family member to take decisions on your behalf in your absence or if you get incapacitated;
  • you prefer to appoint an expert to handle certain tasks.


The first and foremost risk of appointing a Power of Attorney is the risk of misuse by an agent or a representative. Therefore, it is very important to appoint a person or a company that you can truly rely on. If the attorney oversteps his or her bounds, he or she can cause a lot of havoc. Moreover, in many cases people give a General Power of Attorney to anyone without understanding the risks. He or she might authorize the agent to sell real estate properties, manage a business, operate bank accounts, modify a trust or take other action that can have long-lasting consequences on the principal.

It is also important to understand that the agent cannot be taken accountable for his or her actions if he or she acted within the powers granted.

It is also vitally important to get your Power of Attorney drafted by a professional and you should be fully aware of the powers you are granting to your agent prior to signing it.

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