Anyone can find themselves in a situation where they are unable to look after their personal and financial interests. You could be involved in an accident that leaves you in a coma, or you could develop dementia or become incapacitated due to another illness.

If you create a lasting power of attorney now, you can decide for yourself who will look after your interests if you find yourself in a situation where you are unable to do so yourself. You will also be able to set guidelines and restrictions on how this person—the attorney—should manage your interests and assets.

It is also beneficial for your loved ones that someone has the necessary authority to follow up on your obligations and have access to your funds.

What is a power of attorney?

By creating a lasting power of attorney, you give one or more people the authority to manage your finances and personal interests if you are unable to do so yourself in the future.

It is also important for your loved ones that someone has access to your bank account, payment services, online banking, etc. Someone needs to take care of your tax returns, follow up on agreements and subscriptions such as phone subscriptions, newspapers, electricity, and more.

Close relatives have a direct legal basis in the Guardianship Act to perform simple, everyday financial tasks. This is often referred to as "legal power of attorney." However, this right is very limited in comparison to what a power of attorney for the future allows, and does not replace the need for a power of attorney for the future.

What can you decide in a lasting power of attorney?

You largely decide for yourself what you want the person with power of attorney to be able to do in terms of financial transactions or other matters of a more personal nature.

Transfer real estate

For example, many people want their home to be sold if they are admitted to a nursing home, and want the proceeds from the sale to be divided among their children. At the same time, they may not want the home to be sold if their spouse still lives there. You can regulate this in your enduring power of attorney.

You can also set restrictions on the sale of real estate, or limit who is allowed to be a buyer. Perhaps you want the cabin to be sold if you can no longer use it, but only to relatives.

Gifts and advances on inheritance

You can also stipulate in the power of attorney that the attorney-in-fact shall ensure that gifts are given on your behalf. These could typically be Christmas gifts to grandchildren, confirmation gifts, and wedding gifts to relatives and friends. You can also stipulate that the attorney-in-fact has the option of giving advances on inheritance. This may be appropriate in the event of changes to inheritance law and if inheritance tax is reintroduced. Many people also combine the sale of real estate with the sale proceeds being distributed among the children as advances on inheritance.

Power of attorney and will

When you create a power of attorney, you need to think carefully about how you want your assets to be managed. It is also often a good idea to think a little further ahead: what will happen to your assets when you pass away? If you want a different distribution of assets than that provided for in the inheritance law regarding inheritance by relatives and spouses/cohabitants, you can draw up a will.

If you have made a will, you can give your attorney-in-fact the right to distribute advance inheritance payments in accordance with the will in your power of attorney.

How to create a lasting power of attorney?

It is a condition for creating such a power of attorney that you have the capacity to give consent at the time of creation.

There are also formal requirements regarding signing and witnesses. A power of attorney has the same requirements in this regard as a will.

The power of attorney must designate one or more persons who are authorized to act as agents. They must be over 18 years of age. They may be close relatives. Normally, spouses or children are appointed as agents. It is practical to appoint one or more persons to take over the assignment if the designated person is prevented from doing so. The person appointed as proxy may themselves become ill or have passed away by the time the power of attorney takes effect.

From what point in time does the power of attorney apply?

The power of attorney does not apply until your health is so impaired that you are no longer able to look after your own interests.

The power of attorney must specify how it is to take effect.

A lasting power of attorney applies from the moment a doctor declares that your mental and/or physical health is so impaired that you are no longer able to look after your personal interests.

It may also be decided that the State Administrator shall confirm the power of attorney before it becomes valid.

However, when transferring real estate, the Norwegian Mapping Authority requires a certified power of attorney from the State Administrator in order to register the transfer. Some banks also require this.

If you have a power of attorney, the State Administrator does not need to appoint a guardian.

A lasting power of attorney is therefore a "private alternative" to the State Administrator's guardianship system. Without a lasting power of attorney, the State Administrator will continue to appoint guardians for people who, due to mental illness, dementia, or seriously impaired health, are no longer able to look after their personal and financial interests. This can be a difficult process, with strict rules on how funds are to be disposed of and what the guardian can do. It is the State Administrator who decides who your guardian will be.

Tailor the power of attorney to your needs

A power of attorney can be tailored to your needs and wishes, if you so desire. You can also grant a more general power of attorney, where you leave everything to the attorney. A lawyer can help you determine how the power of attorney should be drafted for you and your needs.