Lasting power of attorney – the right choice for you?

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Do you ever consider the possibility that your retirement might not turn out as you had hoped? Or that at some point you may no longer be able to manage your assets and own interests? What if you become incompetent or incapacitated due to an accident, illness or dementia, losing the ability to manage your own banking matters or your assets and investments?

There are two possible solutions to make sure your interests are still properly protected in these cases: a guardianship and a lasting power of attorney. Here’s how the two differ from each other.

What is a guardianship?

When you are no longer capable of making your own decisions, every stakeholder (a relative, for instance) can request in proceedings before the justice of the peace that you be declared legally incompetent and that a guardian be appointed to manage your assets. A medical report must be submitted for this purpose that was drawn up no more than 15 days prior to the request. The justice of the peace will determine which decisions you can no longer make and who will act on your behalf, preferably appointing someone close to you.

The justice of the peace will also determine the powers of the guardian, who will be required to provide annual accounts. The guardian also always requires prior authorisation from the justice of the peace for specific acts.

It is important to note that you can make a statement of preference before the notary public or the justice of the peace in advance, specifying who is authorised to represent you. The justice of the peace can still always decide to appoint a professional guardian, though.

What is a lasting power of attorney?

If you’d prefer not to leave all kinds of decisions up to the justice of the peace, you can have a lasting power of attorney drawn up. This needs to be done while you are still competent. This means you decide to whom you will grant power of attorney and what powers they will be granted.

You can choose to have the power of attorney take effect immediately, allowing the person holding power of attorney to act right away. You will of course still be able to make your own decisions while you are still competent to do so.
Alternatively, you can choose to have the power of attorney take effect from the moment you become incompetent and you are no longer able to act on your own behalf. You can stipulate in the power of attorney how this is to be determined, but, ultimately, the person holding power of attorney decides on the matter. From that point on, third parties, such as a bank, should only take into account the statement of this person holding power of attorney.

In any case, the person to whom you grant power of attorney should be someone you fully trust.

How do I draw up a lasting power of attorney?

If you want to make arrangements for your property in addition to your banking and insurance products, you require a notarised lasting power of attorney. Another advantage of a notarised power of attorney is that you can seek advice from the notary public and that it is drawn up by an expert. The notary public also arranges the registration of the lasting power of attorney in the Central Register of Mandates held by the Royal Federation of Notaries.
If you’d rather not go to a notary public, some banks offer the possibility to convert the banking power of attorney on accounts into a lasting power of attorney. We do note that this only applies to banking matters with that specific bank and not with other financial institutions. You will also need to arrange the registration of the power of attorney with the registry of the peace court of the place of residence of the person granting power of attorney.
Another option is to draw up a private power of attorney yourself, but this provides less certainty, as the wording may be open to interpretation or a bank may want assurance that the power of attorney was drawn up by a competent person granting power of attorney. Private powers of attorney must be registered before the person granting power of attorney becomes incompetent. This can also be arranged by the person holding power of attorney, in which case you will first need to have a copy of the power of attorney certified as a true copy (please note: having a copy of the power of attorney certified as a true copy does not constitute proof of competence). You can then submit this copy to the registry of the peace court of the place of residence of the person granting power of attorney.

Both in the case of a notarised power of attorney and a private power of attorney, you need to make a number of choices:

Do you want the power of attorney to take effect immediately or from the moment you become incompetent?
Who will you grant power of attorney to? Will there be one or more persons holding power of attorney? In any case, the person to whom you grant power of attorney should be someone you fully trust. We would like to point out that it is not always practical for persons holding power of attorney to act jointly. We would also advise you to avoid allowing persons holding power of attorney to act separately only below a certain amount.
It is best to grant them as many powers as possible for your bank transactions, and avoid using ambiguous terms like ‘acts of management’ and ‘acts of disposition’. Also avoid limiting the powers of a person holding power of attorney to only make certain payments as the bank cannot check this. Be sure to explicitly state that the person holding power of attorney can determine the investor profile, and enter into wealth management service contracts and/or wealth management contracts.
Have substitutes been appointed should the person originally appointed to hold power of attorney become incompetent to act?
If you want to make arrangements for your property insurance products (investment-type insurance products, for instance), note that a person holding power of attorney is not authorised to perform all possible transactions.
If you want them to be able to make gifts, this must be explicitly stipulated in the lasting power of attorney: to whom, what, subject to which conditions?
If you want to allow the person(s) holding power of attorney to accept gifts, you must also have this stipulated in the power of attorney.
Amendments to a marriage contract must be expressly stipulated in the power of attorney.
If you are a usufructuary (of, say, an account), it must be explicitly stipulated that the person holding power of attorney may exercise your powers as a usufructuary.
If you are a manager of a partnership or a company, you need to make specific arrangements for this.
Besides your assets, you can also make arrangements for your care in the lasting power of attorney, including allowing the person holding power of attorney to select a residential care centre for you.

Now that I have the power of attorney, what do I do with it?

Keep the document in a safe place and submit it to the bank when you feel it is time. If you chose to have it take effect immediately, the person holding power of attorney will be able to perform all acts right away. The person holding power of attorney will be able to act for as long as they remain competent to do so.

If you chose to have the power of attorney take effect from the moment you become incompetent, the person holding power of attorney will only be able to act from that point on. The power of attorney will stipulate when the person granting power of attorney is considered incompetent. Perhaps a medical certificate issued by one or several medical specialists is required? Note that it is not the responsibility of any third party (like the bank) to check whether these conditions have been met. As regards third parties, only the person holding power of attorney decides whether the power of attorney takes effect. The person holding power of attorney must also inform the bank that the person granting power of attorney has become incompetent, at which point the latter will no longer be able to act or decide on their own behalf.

Is it possible to amend or revoke the power of attorney?

As long as you are competent, you can still amend or revoke the power of attorney, in which case you will need to draw up an amended power of attorney and have it registered again. If you revoke the lasting power of attorney, this has to be registered as well to ensure everyone is aware of the revocation. Be sure to also observe your bank’s general terms and conditions for revoking the power of attorney.

What happens if the power of attorney is abused?

If the power of attorney is abused by the person holding power of attorney, the justice of the peace can at any time amend the power of attorney in full or in part, either on their own accord, at the Public Prosecution Service’s request or at any stakeholder’s request.

Important to note

To plan for the future and be maximally prepared in the event that you become incompetent, you can already have a lasting power of attorney drawn up now. You can also make a statement of preference in advance in the event that the justice of the peace appoints a guardian. In any case, we always recommend seeking advice from a notary public before making any arrangements.

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If you have any questions or need assistance, we’ll be happy to help you.