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.
A Power of Attorney is a legal tool that can be very useful in many cases but it is very important to always know its characteristics and implications before signing. If you have any doubts about this, contact us and we will advise you.