The Agency Law sets out the legal framework governing powers of attorney. A power of attorney authorizes an agent to perform legal acts on behalf of, or in the name of, the principal in dealings with third parties.
In principle, any legal act may be delegated, except for acts that, by their nature or by law, must be performed personally. For example, a person cannot execute a will through a power of attorney.
A power of attorney may be granted in any of the following ways:
In writing;
Orally;
By notifying a third party that the authority has been granted; or
Through the conduct of the principal toward either the agent or a third party.
A written power of attorney is by far the most common form. It is created by a written document signed by the principal, authorizing the agent to act on the principal’s behalf.
Israeli law distinguishes between a General Power of Attorney and a Specific (or Limited) Power of Attorney.
A Specific Power of Attorney authorizes the agent to perform a particular act or carry out a specific transaction.
A General Power of Attorney authorizes the agent to perform virtually any legal act concerning the principal’s property and affairs.
Must a Power of Attorney Be Notarized?
Section 20 of the Notaries Law provides that a General Power of Attorney and a Power of Attorney authorizing real estate transactions requiring registration with the Land Registry are valid only if the signatures have been authenticated by a Notary Public.
For this reason, when a person plans an extended stay abroad and wishes to authorize another person to manage their property or affairs in Israel, a General Power of Attorney is typically executed before a notary.
There is, however, an important exception. Under Section 91 of the Israel Bar Association Law, a General Power of Attorney or a Power of Attorney for a real estate transaction granted to a licensed attorney does not require notarization.
When Does a Power of Attorney Expire?
Section 14(a) of the Agency Law provides that an agency relationship—and therefore the power of attorney—terminates upon the occurrence of any of the following events:
The principal revokes the power of attorney.
The principal dies.
The principal loses legal capacity.
The principal becomes bankrupt or insolvent.
Where the principal is a corporation, upon its dissolution or liquidation.
Exceptions
There are important exceptions to these general rules, including:
An Irrevocable Power of Attorney, granted to secure the rights of another person, such as in a real estate transaction.
An Enduring Power of Attorney, which remains effective even after the principal loses legal capacity, subject to the requirements of Israeli law.
