Power and preventive power of attorney

Caring for a vulnerable person is a long-term process that will require decisions of different scope and significance depending on the family, socio-economic, health and other circumstances of each case.

It is essential to know the alternatives that the law offers, to choose the most convenient and, most importantly, the best practice to follow, because the welfare of our vulnerable family member and the harmony of the environment depend on the good or bad use of the legal institution. Many conflicts have their origin in a mistake, probably unintentional, but resulting in unpleasant situations.

It is very common to consider the use of a power of attorney which, by providing the power to manage the financial resources of the vulnerable person, is considered to be the easiest, simplest and quickest option, mainly because its effectiveness is immediate, requiring only a notarial procedure, avoiding judicial intervention which, apart from being long and costly, in the matter in question has very special connotations, as something as delicate as the life of a loved one is at stake.

Any decision requires prior reflection and subsequent assessment of the circumstances, in the case of a power of attorney it is essential to know some basic concepts that help us to understand its scope. We are going to deal with this in this post.

Article 1259 of the Civil Code establishes that: "no one can contract on behalf of another without being authorised by the latter or without being legally represented by the law". 

Representation may be legal, i.e. expressly provided for by law, and granted by virtue of the pronouncement of a court decision in the relevant proceedings for the adoption of decision support measures.

Or voluntary, the result of a unilateral legal act in which one person (principal) grants another (attorney-in-fact) the power of representation, investing him or her with the status of representative.

Power of attorney and mandate are the figures associated with voluntary representation; we will deal with the former as it is the most frequent option in the case of vulnerable adults.

The best known is the general power of attorney, commonly known as the power of ruin, which grants representation in legal acts and businesses, granting the power to act on behalf of the represented party who will assume the obligations. 

Its validity and effectiveness extends to all acts without specifying in particular, allowing real estate transactions, management of banking assets, applications for credits and guarantees, donations, administrative procedures or any other type of procedure in public or private entities and institutions.

The risk is obvious if this instrument falls into the hands of an unscrupulous and unscrupulous attorney-in-fact, willing to use it without due diligence, the effect can be the spoliation of the principal's assets.

Specific limitations may be established for such acts, as they are considered to be risky, detailing the circumstances that must be met for their execution, which individuals or legal entities may be beneficiaries, and which are expressly excluded.

Less well known is the special power of attorney, granted for one or several businesses exclusively, expressly stipulating the formalisation requirements and the control procedures. 

Few are aware of the existence of the preventive power of attorney, introduced into Spanish law by Law 41/2003 of 18 November on the Protection of the Assets of Persons with Disabilities, and included in articles 256 to 262 of the Civil Code, as a result of the reform established by Law 8/2021 of 2 June, in which it is defined as a voluntary support measure for decision-making. This means that this modality is ideal in the case of a supervening disability in an adult.

In this case, the principal, with full capacity and powers, expressly grants representation in the event of loss of capacity, or includes a subsistence clause in a general or special power of attorney for the aforementioned event.

The preventive power of attorney is a support measure and, as such, its content is not limited exclusively to the management of assets, but also includes the provisions that the principal deems relevant with regard to the care and attention of his or her person. This is the intention of the legislator, although it must be avoided that it becomes a covert form of incapacitation.

The powers of the attorney-in-fact shall be listed in as much detail as possible, which, according to Article 259 of the Civil Code, are: "all the grantor's business", assets and matters relating to the care of the person, such as the place of residence, domicile or a specialised centre, the preventive appointment of a curator and legal guardian, in case it is necessary to establish these support measures.

The attorney-in-fact, once the need for support has been established, is subject to the legal regime established for the guardian, in all matters not provided for in the power of attorney, unless the principal provides otherwise.

It is of vital importance to foresee the procedures and organs of supervision and control, in order to avoid abuses, especially in the extraordinary acts of patrimonial administration, the high-risk ones mentioned in previous paragraphs.

The formalisation of the inventory and rendering of accounts, establishing a period for the general one and some assumptions for the special one, are the traditional instruments inherent to the patrimonial management of other people's assets. In the case of a vulnerable person, the judge is the ideal channel for their approval.

Another question is the determination of the moment at which the need for support arises, which is the reason for the effectiveness of both the power of attorney with a subsistence clause and the preventive power of attorney. The best thing to do is to record this in a notarial deed, providing the relevant medical certificate accrediting the power of attorney.

The judge may modify or even extinguish the preventive power of attorney if the performance of the attorney-in-fact is not suitable, or if the stipulations are detrimental to the welfare of the person with a disability, agreeing the measures he/she deems appropriate as a precautionary measure.

All powers of attorney, without exception, must be granted in a public deed authorised by a notary.