Regulations of conflicts of interest in the Act of future power of attorney – questions and answers

Here you can take part of common questions and answers about Regulations of conflicts of interest in the Act of future power of attorney.

What is a future power of attorney?

A future power of attorney is a power of attorney that is given beforehand to an individual who is going to take charge of someone’s personal and/or economic matters when that individual is no longer capable of that themselves on account of illness or similar circumstances. A future power of attorney is often given to a relative.

The Regulation of conflict of interest

What does the Regulation of conflict of interest in the Act of future power of attorney entail?

The attorney does not have the right to represent the grantor in a matter where the attorney himself/herself, their spouse, partner, or anyone that the attorney represents (the so-called circle of conflict of interest) is an opponent or for any other reason can have conflicting interests.

The effect of the attorney having conflicting interests is that the document becomes invalid. The Regulation of conflict of interest aims to give a better protection of the grantors´ interests.

Who is a part of the so-called circle of conflicting interest?

Included in the circle of conflicting interest are, the attorney himself/herself, their spouse, partner, child, or anyone that the attorney represents. The attorney himself/herself is always a part of the circle of conflicting interest disregarding his/her relationship to the grantor.

Apart from the attorney himself/herself there are also some specifically listed individuals that have a relationship with him/her that are included. It can be the attorneys’ spouse, partner, child, or someone the attorney represents.

A conflict of interest can also arise if the attorney on account of the grantor transfers a property to someone the attorney is guardian ad litem for or is administrator for or to a legal entity or organization where the attorney is also a representative.

When does a situation of conflict of interest arise?

For a situation of conflict of interest to arise it is required that one both:

is included in the circle of conflict of interest
is opponent or can have conflicting interests

It is required that both the first prerequisite and one of the two conditions of the second prerequisite is fulfilled for there to be a conflict of interest. A situation of conflict of interest does not arise solely because one is included in the circle of conflict of interest.

In which situations might there be conflicting interests between the attorney and the grantor?

Examples of situations where there might be conflicting interests between the attorney and the grantor:

Parties to the same estate of a deceased individual
The property is owned together (joint ownership)
The property is the common residence for the spouses / partners

Can I give my children a future power of attorney or will that be a conflict of interest?

A child who is attorney is a part of the circle of conflict of interest but a situation of conflict of interest only arises if there is a situation of opposition or if there can be conflicting interests (between the attorney and the grantor). If the grantor (the parent) and the attorney (the child) for example own a property together then there might objectively be conflicting interests and a situation of conflict of interest arises.

For a situation of conflict of interest to arise it is required that one both:

is included in the circle of conflict of interest
is opponent or can have conflicting interests

Please note that it is up to the grantor who he/she wants to appoint as attorney. Lantmäteriet cannot and shall not give counselling on who can be suitable in a particular case. If you need help with questions regarding drawing up a future power of attorney, then we refer you to legal counselling on the private market.

Why cannot I, as attorney, use the future power of attorney when the grantors’ wishes are stated in it?

It is enough that an objective assessment shows that there might be conflicting interests. The personal point of view is therefore in reality of no importance. That means that even such legal documents that very well comply with the interests of the grantor or that are even spelled out in the power of attorney but that are also in accordance with the attorneys’ interests can be subject to the prohibition of conflict of interest.

"We don't have conflicting interests and I can prove it"

It is enough that an objective assessment shows that there might be conflicting interests. The assessment that Lantmäteriet makes, that are based on the reasoning in the legislative history of the act, will be based on objective criteria. Objective criteria mean how a corresponding situation is generally assessed. The personal point of view is therefore of no importance. This means that even such legal documents that very well comply with the interests of the grantor or that are even spelled out in the power of attorney but that are also in accordance with the attorneys’ interests can be subject to the prohibition of conflict of interest.

Why is there a conflict of interest when the grantor owns the property together with someone from the circle of conflict of interest?

The attorney does not have the right to represent the grantor in a matter where the attorney himself/herself, their spouse, partner, child, or anyone the attorney represents (the so-called circle of conflict of interest) can have conflicting interests in the sale. That the spouses own a property together means that objectively they can have conflicting interests.

A common scenario is that two spouses or cohabitants (partners) sell a property that they own together. One of the spouses/partners signs the sales document for themselves but also on behalf of the other spouse/partner through a future power of attorney. Since the property is owned together there might be conflicting interests. Then there is a conflict of interest according to the Act of future power of attorney and the sales document becomes invalid, since the one who has signed the document on behalf of the grantor lacks authority to represent him/her based on the future power on attorney.

Why is there a conflict of interest when the grantor owns the property by himself/herself, but it is the common residence together with someone from the circle of conflict of interest?

Since there is a right to take over the property in a division of the common residence then there can objectively be a conflict of interests between the attorney and the grantor. So even if the grantor owns the property themselves but it is the common residence together with the attorney then there is a situation of conflict of interest.

Possibilities and obligations

What obligations do I have, who have a future power of attorney, to decide if I am challengeable?

When the attorney acts on behalf of the grantor then he/she constantly needs to assess the risk for a situation of conflict of interest arising, that follows with the future attorney’s duty of loyalty.

What shall I do to be able to sell the common residence when the future power of attorney is no longer valid?

The problem of conflict of interest can be solved if you as attorney apply to have guardian ad litem appointed for that specific legal document, for example for a sale of a property.

How can I write a future power of attorney to avoid that a conflict of interest arises?

Lantmäteriet cannot and shall not give counselling on the wording of future power of attorneys or other legal documents. If you need help with questions about drawing up a future power of attorney, then we refer you to legal counselling on the private market.

Lantmäteriets’ standpoint

Why does Lantmäteriet “suddenly” make this new interpretation of the Act of future power of attorneys?

Lantmäteriet has found reason to look over the process of controlling future power of attorneys, to ascertain that similar assessments are made in similar cases. During that process the agency has found that the Regulations of conflict of interest need to be practiced in a wider manner than what has been done previously so it harmonizes with the legislation and the legislators reasoning.

Which registration cases will be affected?

Registration of ownership, mortgage and granting and making agreements about usufructs or easements, but all registration cases might be affected.