Disability and preventive powers
One of the main issues that many clients raise in notarial offices is the need to find a solution to a matter as important as the incapacity of a relative, or that which the interested party themselves may suffer in the future, due to the patrimonial and personal consequences involved.
Among other solutions and, surely, the fastest, most economical, and the one that most reflects the will of the affected party is the figure of the PREVENTIVE POWER OF ATTORNEY. For this reason, in the following lines, we intend to provide some small guidelines that may serve as a guide.
"However, one can also resort to the figure of the PREVENTIVE POWER, which is nothing more than a simple power of attorney aimed at the care of the estate and even of the person themselves in anticipation of being incapacitated at a future time."
What Is a Preventive Power?
The issue posed by a possible incapacity can be resolved through various institutions, such as guardianship or curatorship, depending on the case, but these are slow and complicated processes. However, one can also resort to the figure of the PREVENTIVE POWER OF ATTORNEY, which is nothing more than a simple notarial power of attorney aimed at the care of the estate and even the person themselves in anticipation of being incapacitated at some future time. In other words, it is a notarial document in which the interested person grants more or less broad powers to another person to manage their estate and/or their person in case of incapacity.
What we have just explained can be better understood with an example. Let us consider an elderly person who has accumulated an estate over their lifetime and who, for various reasons, needs special care, which would entail a significant expense for them and their family, and, furthermore, becomes incapacitated, which prevents them from taking care of themselves and their assets. Two situations may arise:
- If they have not granted any power of attorney, the affected person would not be able to sell or dispose of their assets to meet their needs, nor even make personal and medical decisions. In this case, the solution would involve a judicial incapacity procedure, the appointment of a guardian or curator, and even prior judicial authorisation each time the sale of an asset was necessary. This would entail a cost in terms of time and money.
- If they had granted a preventive power of attorney, on the other hand, the person they had appointed could sell assets, manage them, and cover the expenses required for their care, without the need to open any judicial process, thereby facilitating the care of the person themselves and giving more peace of mind to those around them.
The importance of willpower
The main characteristic of these documents, besides the ease, speed and cost-effectiveness of their execution, is the significance of the will of the person granting it. It is the interested party themselves, and possible future incapacitated person, who decides who will be in charge of managing their person and assets, what powers are granted or the period in which such powers begin to be exercised. In other words, it is the interested party themselves, who may be affected by incapacity and who best knows their personal and financial situation as well as that of their environment, who decides on who, how and when the representation will be exercised, without a third party, such as a judge, substituting that will.
Taking advantage of these lines, I will now set out, as a guide, the main points that can and should be taken into account when granting the power of attorney deed:
A) Who is going to exercise it and how
This decision is, of course, the most important one that the person granting the power must consider. Who will you entrust with the task of taking care of your person and assets? Logically, they should be people of your utmost trust and closeness, generally those closest to you, whether it be your spouse, your children, grandchildren, parents, siblings, etc. It should be noted that at this point Notaries, in the exercise of our duties, ensure that the person granting the power wishes to grant it to the person indicated, and that their will has not been forced or coerced to grant it, thus protecting the interests of the affected party.
The choice may fall on a single person, but also on several, either to exercise the power simultaneously or for it to be exercised by one person and, failing that, by another. In the case of appointing several people to exercise representation jointly, it is important to decide:
- Whether it is granted jointly, or in other words, whether it is necessary for several people to act together and agree on each act. For example, that to sell it is necessary for the spouse and one of the children, or all the children, to act jointly. This provides greater security, not only for the future incapacitated person but also for those acting on behalf of the represented party, as it can prevent possible future conflicts among them.
- Whether it is granted severally, in this case, although several people have been appointed, any one of them may act separately from the others. Following the previous example, the consent of the spouse or just one of the children will suffice to sell a property, which grants greater speed and ease when acting, but may give rise to possible conflicts among the attorneys.
It is important to clarify that the person granting the power can revoke it by going to any Notary, whenever they wish or when they lose the trust placed in the previously named persons.
B) What powers can be included
The person granting the power can freely choose the powers they want to give to the people they trust and can even decide that it applies to their entire estate or to certain assets. Thus, we can differentiate between:
- General power: includes all possible powers, including the sale and leasing of assets, representation in inheritances, business management, administration and disposal of bank balances, and even medical and health-related decisions. For example, the power to donate the represented person's assets would be excluded.
- Special power: This is one that limits the power to one or several powers or to one or several assets. For example, being able to dispose of the money in bank accounts but not sell the properties, or only being able to sell this or that house.
It should be borne in mind that the broader the powers granted, the greater the risk of abuse by the person receiving the powers, with general power commonly known as the power of ruin, so it is very important to carefully analyse to whom the power is given.
C) When can one start practising
Regarding this point, the power can begin to take effect whenever the grantor wishes. It is very common for the person granting the power to want the recipient to start using the power from the very first moment, even if they are not incapacitated, but nevertheless, it is their wish that if they do become incapacitated, the power can continue to be used, as if nothing were said, the power would be ineffective once incapacity has occurred.
A purely preventive power can also be granted, that is, one whose effectiveness does not arise from the first moment but arises once the represented person becomes incapacitated, in which case the attorney, in order to use the power, will need to prove this situation with, for example, a medical certificate that certifies it.
D) Can I include any limitation or control?
Yes, the limitations that are desired can be included. Some limitations we have already mentioned; the moment the power begins; the powers that are conferred; the way of exercising the power, whether jointly or severally. These are limitations that the person granting a power can take into account.
Among other limitations, it can be decided that for selling certain goods judicial control is or is not necessary and that it is the judge himself who authorises the sale. This, evidently, provides much more security for the person granting it but it is also more complicated and costly to obtain, potentially being contrary to the purpose for which the power was conferred. Speed and cost reduction.
What requirements are necessary to grant it?
The necessary requirements to grant a power of attorney are fundamentally two:
- Willingness to grant the power and knowing and understanding the consequences of granting it. At this point, the role of the Notary comes into play, to verify that the person granting it is not doing so under duress or deception, but freely, and above all to provide the advice and assistance they need completely free of charge.
- Attending with the corresponding identity document
I hope this small guide is helpful to understand the function of preventive powers of attorney and the positive significance they can have. I have tried to make a brief explanation and, of course, if you need any advice or assistance do not hesitate to contact J&LA Notarios Asociados, as each client is different and everything must be tailored to their needs. We are at your full disposal.
