Power of attorney: when and how to make it

A power of attorney gives one person the right to act on another person's behalf. That sounds simple, but there are big differences in the reach of the power of attorney, the requirements for its form and the legal effects. This guide explains the most important types of power of attorney in Denmark, when you need them, and what to watch out for.

What is a power of attorney?

A power of attorney is a legal document that gives one person (the attorney) the right to enter into agreements and act on behalf of another (the grantor). The attorney can, for example:

• Sign contracts on the grantor's behalf
• Operate bank accounts
• Sell or buy real property
• Represent the grantor before authorities

A power of attorney is not a transfer of ownership. The attorney acts on someone else's behalf, not for their own account.

When do you need a power of attorney?

Powers of attorney are used in many everyday situations:

• Bank transactions: a spouse or child is to operate your account
• Property transactions: you cannot attend the signing in person
• Business: an employee or partner is to enter into agreements on the company's behalf
• Authorities: you need help with a case at the tax authorities, the municipality or on borger.dk
• Illness or disability: you can no longer look after your own interests (see lasting power of attorney)
• Stay abroad: you are temporarily away and need a substitute

The most important types of power of attorney

1. Specific or limited power of attorney

A specific power of attorney gives the attorney the right to act within a narrowly defined area. It is the most common and safest form.

Example: "[Name] is hereby authorised to sign the purchase agreement concerning the property [address] on my behalf on [date]."

Use a specific power of attorney when you want to limit the attorney's scope as much as possible.

2. General power of attorney

A general power of attorney gives the attorney broad authority to act on all your behalf, in all areas of law and towards everyone.

Use it with caution. A general power of attorney gives the attorney almost unlimited authority and should only be given to someone you trust absolutely.

Banks and authorities do not always accept general powers of attorney and can require more specific documents.

3. Lasting power of attorney

The lasting power of attorney is a special legal instrument that only takes effect when you can no longer look after your own interests, typically because of serious illness, dementia or an accident.

What can a lasting power of attorney cover?

• Personal matters: housing, care and contact with authorities
• Financial matters: banking, pension and property

Requirements for the lasting power of attorney:

• It must be created while you are healthy and of sound mind
• It must be acknowledged before a notary
• It must be registered in the Lasting Power of Attorney Register via tinglysning.dk
• It only takes effect when the Family Court House brings it into force

The lasting power of attorney is an alternative to having a guardian appointed, and it gives you control over who looks after your interests if you can no longer do so.

4. Prokura (commercial power of attorney)

Prokura is a special power-of-attorney construction for businesses. A holder of prokura can act and sign on the business's behalf within its normal operations. Prokura is not governed by a separate "Prokura Act" (the old one has been repealed); for personally owned undertakings it follows from section 7 of the Act on Certain Commercial Undertakings, and otherwise from the general agency rules. Prokura is not registered in CVR but is proven by a written procuration declaration, where the holder signs "p.p." (per procuration).

Requirements for a valid power of attorney

For a power of attorney to be legally valid, it should as a minimum:

Contain

• The grantor's full name and address
• The attorney's full name and address
• A clear description of what the attorney is authorised to do
• The date and the grantor's signature

Have the right form

• A simple power of attorney can as a rule be created without formalities (writing is always best)
• Property powers of attorney typically require a signature before a notary or confirmation by two witnesses
• A lasting power of attorney requires the notary's endorsement and registration

Rest on valid capacity

The grantor must be able to act rationally, that is, not have been deprived of legal capacity and not be in a state that prevents a rational decision.

What can a power of attorney not be used for?

There are things a power of attorney cannot authorise:

• Making a will: a will is personal and cannot be made via a power of attorney
• Entering marriage: requires personal participation
• The attorney's own rights: a power of attorney can only give the right to act for the grantor, not transfer the attorney's personal rights

Revoking a power of attorney

You can revoke a power of attorney at any time. Revocation should be done:

1. In writing to the attorney
2. With notice to the third parties (banks, counterparties) who know of the power of attorney
3. With registration, where the power of attorney is registered (lasting power of attorney and prokura)

An oral revocation can in principle be valid, but written documentation is crucial. If the power of attorney has been shown to a particular third party, that party should be notified directly.

Power of attorney for the bank

Banks have their own procedures for powers of attorney. Most large banks require:

• The bank's own power-of-attorney forms, not just a privately written document
• A personal visit or a confirmed digital signature
• Valid identification from the attorney

Contact your bank to find out exactly what it requires before you try to send a generic power of attorney.

Power of attorney and authorities

To act on someone else's behalf towards the public sector, the following are most often used:

• A digital power of attorney via borger.dk: requires the grantor to actively create the power of attorney in the system while they are of sound mind and have MitID
• A physical power of attorney: accepted by many authorities, but requires documentation

Frequently asked questions

Must a power of attorney be confirmed by a notary?

Only in certain cases, for example property transactions and lasting powers of attorney. An ordinary power of attorney for everyday use does not need notary confirmation.

Does a Danish power of attorney apply abroad?

A Danish power of attorney can be accepted abroad, but many countries require a notary-confirmed power of attorney with an apostille. Contact a notary if the power of attorney is to be used abroad.

Can my spouse automatically act on my behalf?

No. Spouses do not automatically have the right to dispose of each other's funds or act on each other's behalf. A power of attorney is needed.

What is the difference between a power of attorney and a guardianship?

A guardianship is established by the public authorities and given to a person who cannot look after their own interests. A power of attorney is voluntary and can be revoked. A lasting power of attorney is designed precisely to reduce the need for a guardianship.

Can a child sign with a power of attorney for their parents?

Yes, an adult child (aged 18 or over) can hold a power of attorney from their parents. Banks and authorities can, however, have their own requirements.

Conclusion

A power of attorney is a flexible and useful tool, but it requires thought. The broader the power of attorney, the greater the risk. As far as possible, use a specific power of attorney that describes exactly what the attorney may do. For future planning, the lasting power of attorney is an important document to create while you are healthy.

---

The content of this article is for guidance only and does not constitute legal advice. Consult a lawyer or notary for advice on your specific situation.