If we had a crystal ball and could see in to the future wouldn’t it be wonderful – we could plan and manage our businesses and personal affairs accordingly. Unfortunately none of us can predict what is around the corner and so the importance of having the right person in the wings with the legal authority to act on your behalf, if you are not in a position to do so yourself, cannot not be understated.
If someone becomes incapacitated through disability, illness or a progressive degenerative disease their assets become frozen. To avoid this situation a person, while in good health, should create an Enduring Power of Attorney (EPA). This a legal document which only takes effect in the event that that person becomes mentally incapacitated. The person creating the EPA is known as the Donor and in the event of his/her incapacity, power to deal with the Donor’s money and assets transfers to the Attorney.
The Donor is not prevented from dealing with his/ her money and assets by creating the EPA, this only happens if the Donor becomes mentally incapacitated.
An EPA can be very specific, e.g. give the Attorney a particular task to carry out like the sale of property or management of bank accounts. The other type of EPA would be very general and virtually entitle the Attorney to do everything that you would do yourself, with your money and property. Importantly this second type of EPA will also enable your Attorney to make “personal care” decisions e.g. where the Donor lives, whom he should see and not see, diet and dress.
You can appoint anyone you wish to act as your Attorney e.g. spouse, family member or a friend. You can also appoint more than one person. The choice of Attorney is a personal matter but a good deal of thought needs to be given to the nomination. You need to ask yourself is this person suitable for the job? Are they trustworthy and do they have the skills to manage my affairs and make decisions for me?
The procedure for the creation of an EPA is complex. You will have to consult your Solicitor and your Doctor. Your Solicitor will prepare the documentation for you after consultation with you and deciding whether a specific or general Power of Attorney is more suited to your needs.
Amongst the paperwork that needs to be completed in order for the Power of Attorney to be valid are:
- A statement from your Solicitor that you understood the effect of creating the Power of Attorney
- A statement from your doctor confirming that you had mental capacity to understand the effect of creating the Power of Attorney
- A statement from you that you understood the effect of creating the power
The process also requires your Solicitor to notify two family members that you have made the Power of Attorney.
The EPA can be revoked at any time before it is registered. If you change your mind about having an EPA or about your choice of Attorney you should consult your Solicitor immediately. Your Solicitor will advise on the process of revocation of the EPA.
The Attorney must apply to the High Court for registration of the EPA if the Donor becomes mentally incapacitated. The Court will require him/her to produce medical evidence of the Donor’s incapacity and notice of the application to register the EPA must also be served on the Donor and the same two persons that were notified of the creation of the EPA.
Once the EPA is registered the Attorney can lawfully act on the Donor’s behalf.
An Enduring Power of Attorney is as important as your Will, but many people place more emphasis on the latter. The Enduring Power of Attorney will prevent a situation arising where money assets become frozen as friends and family members struggle to cope with the stresses and demands that illness will foist upon them.