The provision of conflict of interest in the Future Powers of Attorney Act – questions and answers

Here you can read common questions and answers about the provision of conflict of interest in the Future Powers of Attorney Act.

What is a future power of attorney?

A future power of attorney is a power of attorney that is given in advance to a person who is to take care of someone's personal and / or financial affairs when he or she is not capable of this due to illness or similar circumstance. Future power of attorney is often given to a family member or someone close to the one who has given the power of attorney.

The provision of conflict of interest

What does the provision of conflict of interest, which can be found in the Future Powers of Attorney Act, mean?

The proxy holder does not have the right to represent the proxy provider in a matter where the proxy holder himself, his spouse, cohabiting partner, children or someone whom the proxy holder represents (the so-called conflict of interest circle) is the counterparty or for any other reason may have conflicting interests.

The effect of the proxy holder being considered in conflict of interest is that the document becomes legally invalid. The conflict of interest rule aims to provide enhanced protection for the interests of the proxy providers.

Who are included in the so-called conflict of interest circle?

The conflict of interest circle include the proxy holder, his or her spouse, cohabiting partner, children or someone whom the proxy holder represents. Thus, the proxy holder himself is always included in the conflict of interest circle – regardless of what relationship he or she has with the pproxy provider.

In addition to the proxy holder himself, there are also certain specially listed persons who are in relation to him or her, who are also covered. It can be the proxy holder's spouse, cohabitant, children or someone who the proxy holder represents.

A conflict of interest may also occur if the proxy holder transfers a property on behalf of the proxy provider to someone for whom the proxy holder is a custodian or legal guardian or to a legal person or an organization where the proxy holder is a legal representative.

When does a conflict of interest occur?

In order for a conflict of interest to occur, it is necessary to be both:

a part of the conflict of interest circle
a counterpart or someone that may have conflicting interests.

It is required that both point 1 and any of the conditions in point 2 are met in order for there to be a conflict of interest. Thus, a conflict of interest situation does not occur just because you are part of the conflict of interest circle.

In which situations may there be conflicting interests between the proxy holder and the proxy provider?

Examples of situations where there may be conflicting interests between the proxy holder and the proxy provider:

Part in the same estate of a deceased person.
Immovable property is owned together (co-ownership).
Immovable property constitutes a joint residence/cohabiting property for spouses/cohabitants.

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

A child who is a proxy holder is included in the conflict of interest circle, but a conflict of interest situation only occurs if there is a counterparty situation or if there may be conflicting interests (between the proxy holder and the proxy provider). For example, if the proxy provider (parent) and the proxy holder (child) own an immovable property together, there may objectively be conflicting interests and as a result a conflict of interest situation occurs.

In order for a conflict of interest situation to occur, it is necessary to be both:

a part of the conflict of interest circle
a counterparty or someone that may have conflicting interests.

Please note that it is up to the proxy provider (appointer) to decide who they want to make the proxy holder. Lantmäteriet cannot and should not provide advice on who may be suitable in the individual case. If you need help with questions about establishing a future power of attorney, we refer to legal advice on the private market.

Why can I, as a proxy holder, not use the future power of attorney when it is even stated in it what the proxy provider wants?

It is sufficient that, in the case of an objective assessment, there may be conflicting interests. Personal opinion is therefore completely irrelevant in practice. This means that even such legal acts that are very well in line with the interests of the proxy provider or even stated in the power of attorney but that are also in accordance with the interests of the proxy holder are subject to the prohibition of the conflict of interest.

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

It is sufficient that, in the case of an objective assessment, there may be conflicting interests. The assessment that Lantmäteriet makes, and which is based on the reasoning in the preparatory work of the law, will thus be based on a completely objective criteria. Objective criteria mean how a corresponding situation is generally assessed. The personal opinion is therefore irrelevant.

This means that even such legal acts that are very well in line with the interests of the proxy provider or even stated in the power of attorney but that are also in accordance with the interests of the proxy holder are subject to the prohibition of the conflict of interest.

Why is there a conflict of interest when the power of attorney owns the property together with someone in the conflict of interest circle?

The proxy holder is not entitled to represent the proxy provider in a matter where the proxy holder himself, his or her spouse, cohabitant, children or someone whom the proxy holder represents (the so-called conflict of interest circle) may have conflicting interests in the sale. The fact that the spouses own a property together means that objectively they may have conflicting interests.

A common scenario is that two spouses or cohabitants sell a property they own together. One spouse/cohabitant signs the deed of sale for himself or herself but also for the other spouse/cohabitant with the support of future power of attorney.

Since the property is owned together, there may be conflicting interests. There is a conflict of interest under the Future Powers of Attorney Act and the deed of sale becomes invalid, since the person who signed the document on behalf of the proxy provider does not have the authority to represent him or her on the basis of the future power of attorney.

Why is there a conflict of interest when the power of attorney owns the property individually but it is a joint residence with someone in the conflict of interest circle?

Since there is a right to takeover the joint residence in the division of property, there may also be conflicting interests between the proxy holder and the proxy provider. Even if the proxy provider owns the property himself (individually) but it is a joint residence with the proxy holder, a conflict of interest situation occurs.

Opportunities and obligations

What obligations do I have as a holder of a future power of attorney to determine if there is a conflict of interest?

When the proxy holder acts on behalf of the proxy provider, he or she must constantly assess the risk that a conflict of interest situation may occur, it follows from the duty of loyalty of the future proxy holder.

What should I do to be able to sell the joint home when the future power of attorney does not suffice?

The conflict of interest problem can be solved by you as a proxy holder applying to have a guardian appointed for the specific legal act, for example in the event of a sale of an immovable property.

How should I write a future power of attorney to avoid conflict of interest?

Lantmäteriet cannot and should not provide advice on the wording of future powers of attorney or other legal documents. If you need help with questions about establishing a future power of attorney, we refer to legal advice on the private market.

Lantmäteriets position

Why is Lantmäteriet "suddenly" doing this new interpretation of the law on future powers of attorney?

Lantmäteriet has had reason to review the control of future powers of attorney, to ensure that similar assessments are made in similar cases. In the context of this work, Lantmäteriet has concluded that the provision of the conflict of interest needs to be applied in a broader sense than it has been so far, in order to harmonize with the legislation and the intent of the legislator.

What registration of ownership cases are affected?

Applications regarding registration of ownership, mortgages and applications regarding usufructs or easements, but all registration matters may be affected.