The importance of an extrajudicial protection mandate in times of coronavirus

The benefits of the extrajudicial protection mandate

The extrajudicial protection mandate is a form of extrajudicial protection. This means that judicial intervention is not required and that the principal can enter into an agreement with one or more authorised representatives. As a result, the representative or person of trust can manage goods or arrange personal care if the principal is (temporarily) no longer able to do this himself or herself due to illness or an accident. This is where there is an important difference compared to the banking mandate, which in principle can be revoked by the banker if there are signs of dementia.

Commencement of the extrajudicial protection mandate

In principle, the principal determines how the mandate commences. A first possibility is to draw up a mandate that is already executed before the incapacity of will and with the explicit stipulation that the mandate continues after the principal has become incapacitated to act. By adding a suspensive condition of the legal capacity of the principal, it is also possible to provide a special or general extrajudicial protection mandate from the moment that the principal no longer has legal capacity. In both cases, the principal will still be able to perform legal acts himself or herself as long as he or she is able to do so.

In practice, certain clauses also allow a combination of a continued mandate for a specific subject and a deferred mandate for general assets. In addition, the commencement may depend on one or more medical certificates or a statement from the general practitioner. In this way, protection can be built in against possible misuse by the authorised representative(s).

The extrajudicial protection mandate as a planning tool

To be able to donate, sell a house or enter into a contract, you must always have legal capacity. Many of these acts can be outsourced via the extrajudicial protection mandate. Only the drawing up of a will is excluded here. A will is a personal document.

When it comes to drawing up the mandate you have two possibilities. You can limit the mandate to a clearly defined legal act, or you can draw up a general mandate in which the assets will be fully managed. The principal can decide that the (remaining) donations are only allowed to descendants (children and/or grandchildren) or that they all receive the same amount at the same time. In this way, the inheritance tax can be reduced for the heirs and they can benefit from the lower gift taxes for movable property (3% or 3.3%) or for family enterprises (0%). Furthermore, an extrajudicial protection mandate can also be useful to make another (registered) manual or bank donation, to modify or buy off the beneficiary of a Tak 21 or Tak 23 life insurance policy.

Although an extrajudicial protection mandate can be drawn up privately, in most cases it will be advisable to have a notarial power of attorney drawn up. In addition, a notarial power of attorney is mandatory if the authorised representative has to perform legal acts that require a notarial deed, such as amending a marriage contract, carrying out a sale of a house and a sale of property or a notarial donation. 

When drawing up an extrajudicial protection mandate, it may also be advisable to take the marriage contract at hand and check whether there is a choice clause. Depending on the wording of this choice clause, it allows the longest living person to have certain matters assigned to him or her at the time of death. It regularly states that the survivor may exercise his or her choice 'entirely arbitrarily'. However, this can have a blocking effect in the exercise of both the marriage contract and the extrajudicial protection mandate. 

Do you have any questions about the extrajudicial protection mandate, or do you need help with formatting? If so, please contact your account manager or one of our specialists at corona@vdl.be.