Written by: Lawyer/Partner Johannes Andersen and Senior Lawyer Bjørg Strandos Granderud
Everyone knows that you can use a will to decide what happens to your assets after you die. This can be very important: the legal system does not, for example, make many provisions for cohabitants but there could still be a strong need to safeguard their interests. Some of this need can, at least, be safeguarded by establishing a will.
Nevertheless, too few people are aware that it can be just as important to safeguard yourself and your loved ones while you are alive – in the event that you develop dementia or lose your ability to consent. The need to safeguard those around you while you are still alive but have lost this ability can be extremely important, as such a situation could last for a number of years. You can make significant provisions for this through the use of a post-dated authorisation.
Having worked with inheritance planning and succession for a number of years, we are increasingly seeing the value of post-dated authorisations. This is the case especially if you are married or cohabiting and have joint ownership of something. Many people are not aware that if the person you have joint ownership with loses their ability to consent, you will also lose your right of disposal over your part of the assets.
In simple terms, a post-dated authorisation is a private alternative to guardianship. It will enter into force at the time a physician declares that a person has lost their ability to consent. Instead of a guardian being appointed by the County Commissioner, you are able to decide who your authorised person will be. More importantly, the post-dated authorisation allows you to set out the framework for how the authorised person will be able to dispose of your assets and assets that are jointly owned. You can even provide instructions concerning advances on inheritance if you wish.
An ordinary guardian is subject to a number of disposition restrictions, including being unable to sell real estate, rent it out or take out debts without the consent of the County Commissioner. This applies even if the appointed guardian is a relative and perhaps even owns part of the property together with the person who has been placed under guardianship.
We recommend that everyone who is married or cohabiting creates a mutual post-dated authorisation appointing each other as the authorised party. The authorisation can be used to entrust complete actual and legal right of disposition over everything that you own and that you own together. In this way, you can ensure that your spouse/cohabitant is able to decide whether they want to keep the former jointly owned residence, whether it will be rented out or whether it is necessary to increase debt.
Finally, it must be noted that a post-dated authorisation also allows you to extend gifts or otherwise distribute assets while the principal is still alive. Since the post-dated authorisation will take effect while the principal is alive, the rights of disposal will generally not be testamentary dispositions and are therefore generally not subject to the limitations set out in the Inheritance Act concerning compulsory heirship. The post-dated authorisation therefore provides the opportunity to circumvent the rules set out in the Inheritance Act to the extent that the dispositions are realised with a sufficient degree of actuality on the part of the benefactor. Of course, if a will has been created, it is also natural to decide that distribution will take place in accordance with the provisions of the will.
A post-dated authorisation is easy to set up and will be valid only for a few years, clear rules will be followed. But it is extremely important to do it right, as the document will otherwise be invalid, regardless of reason. If you follow the rules for wills, everything will be in order and it can therefore be a good idea to do both at the same time. You should obtain assistance from a lawyer familiar with the field in order to be on the safe side.