Back in September 2020, we reported on the ruling of the High Court regarding the disputed interpretations of sample policy wording of insurance cover for businesses. The Financial Conduct Authority...
Estate planning - Spanish Law
Sadly, statistics indicate that many people will inevitably lose the capacity to deal with their affairs themselves but are still required to cover ongoing care costs. If this situation arises, what options are available and how will assets based abroad be affected?
By registering a Power of Attorney, a person selects individuals to be granted the legal authority to act on their behalf. For instance, the ‘attorneys’ are therefore able to sell the person’s property and administer their bank accounts. With this in mind, it is vital that the person making a Will fully trusts the attorneys whom they appoint, be they friends and family or professional advisers.
In Spain, there are two legal documents, similar to Lasting Power of Attorney in the UK, that cover situations where a person no longer has capacity to make decisions for themselves. These are a Preventative Power of Attorney ‘Poder Preventivo’ which deals with financial arrangements, and an Appointment of Tutor ‘Autotutela’ which addresses health and care provision. When a person with assets in Spain becomes incapacitated, it is worth obtaining both documents to ensure that their estate is protected in relation to judicial decisions.
A Preventative Power of Attorney will usually make provision for the purchase or sale of property, operating bank accounts, setting up direct debits, arranging utility contracts and paying bills and taxes on a person’s behalf.
An Appointment of Tutor tends to cover decisions on healthcare provision, daily routine and living arrangements for a person who is incapacitated.
Spanish Powers of Attorney can be obtained through a Spanish notary public.
However, many questions may still arise. What if English Powers of Attorney have not been signed and there is uncertainty over whether a similar document has been signed relating to a person’s Spanish affairs? When an estate is to be distributed, any Spanish property is likely to be a highly valuable asset that could be earmarked for sale. In this instance, would the attorneys be permitted to deal with the property?
If a Spanish Power of Attorney was granted relating to a property purchase, it is unlikely to empower the attorneys to deal with any Spanish affairs if required. The same can be said for any standard English Power of Attorney.
A Lasting Power of Attorney (LPA) registered in the UK would need to be validated by the Spanish authorities. A legalised sworn translation of the LPA is required and is checked by Spanish officials to ensure that it is acceptable for use in Spain. They may also prepare a professionally sworn statement declaring the basis under English law for the Attorneys’ authority to represent the person to whom the estate belongs. This usually takes around a month to complete at an estimated cost of £1,000 to £2,000. Attorneys operating under an English Power of Attorney cannot appoint a further Attorney in Spain to sell the property and should be prepared to incur the travel costs involved in completing any transaction.
If an Enduring Power of Attorney (EPA) has been made, or made without registering an LPA, then further cost and delay will be incurred to register either of those two documents in England before starting the process of validation in Spain.
If neither an LPA nor an EPA exists, it is advisable to apply to the English Court of Protection to appoint a Deputy who will manage the person’s property, affairs and personal welfare as required if they lack capacity to do so independently. However, Deputyships can be costly and time-consuming to acquire. Nevertheless, with the right professional advice, a Deputyship Order can appoint a Spanish Attorney to avoid the travel costs involved with selling a property in Spain, as would be incurred by an English attorney.
An application to a Spanish Court for an English PoA or Deputyship Order to be recognised can be made in particularly complex situations. Such an application is likely to incur further cost and delay but this may be avoided with the right professional advice.
Acting in advance helps to avoid unnecessary cost and delay can be avoided. Moreover, it can reduce the amount of worry involved for loved ones at an already distressing time.
For a fraction of the cost involved with the above options, an LPA can be signed (and possibly registered) to cover any English affairs, as can a separate, appropriately worded Spanish document authorising suitable Attorneys to deal with any Spanish affairs. These actions should minimise any difficulties involved and ensure as quick a sale as possible.