What is a power of attorney?
A POA (power of attorney) is a legal document that grants a person (the attorney-in-fact) the authority to act on behalf of another person (the principal) in legal, financial, or administrative matters. This document must be executed before a notary public, who authenticates the principal’s will and provides public attestation of the agreement.
Main characteristics of POAs in Spain
- Formalization before a notary: The power must be signed before a notary to be legally valid. The notary ensures that the principal is mentally competent and understands the implications of delegating authority.
- Types of powers: There are several types. The most common are the general power (granting broad authority for various actions) and the special power (limited to a specific act, such as selling a property or representing someone in court).
- Revocability: The principal can revoke the power at any time, except in specific cases where agreed otherwise.
- Duration: Unless a limited duration is specified, POAs are indefinite and only end by revocation, death, or incapacitation of the principal.
Common uses of POA
- Asset management: Frequently used in banking transactions, real estate sales, or business management.
- Legal representation: In court proceedings, an attorney can act on behalf of the principal if given a power of attorney.
- Inheritance management: Heirs may appoint an attorney-in-fact to handle inheritance proceedings on their behalf.
- Travel or foreign stays: When someone cannot be physically present for important signings, they may grant a notarial power to another person to act on their behalf.
Advantages:
- Time-saving: Delegating legal or administrative actions can speed up processes that require the principal’s physical presence.
- Flexibility: A notarial power can be tailored to the principal’s specific needs, allowing clear control over the delegated authority.
- Legal certainty: Supervised by a notary, notarial powers provide trust and legitimacy to transactions.
- Help for the elderly or disabled: People who, due to age or illness, cannot handle certain matters themselves can appoint someone to act on their behalf.
And few disadvantages:
- Potential abuse of power: There’s a risk that the attorney-in-fact might exceed their authority or act against the principal’s interests. Therefore, it’s crucial to appoint someone trustworthy.
- Cost: The formalization of a power of attorney before a notary has an associated cost, which can vary based on the complexity of the document.
- Geographical limitations: Some notarial powers, while valid in Spain, may not be automatically recognized abroad, requiring additional procedures.