Enduring Powers of Attorney – a financial and practical solution;
An Enduring Power of Attorney is something that should be considered by all clients when reviewing their affairs.
In Ireland, if a person becomes mentally incapacitated, for example due to illness or disability, all of their assets are effectively frozen and cannot be accessed by anyone. This can lead to a situation where a mentally incapacitated person who requires care (for example, full time residential care) may have sufficient means to pay for that care, however their loved ones cannot access their assets because they have no legal authority to do so. Unfortunately, this scenario is very common and can place considerable financial strain on families who are dealing with an already distressing situation when their loved one becomes unwell.
Thankfully, the law provides an effective and practical mechanism to ease the burden somewhat in a document known as an Enduring Power of Attorney (EPA). An EPA can be created by a person (the Donor) when he/she is in good mental health, to allow another specifically appointed person or persons (Attorney/Attorneys) to make certain decisions and look after the Donor’s personal and financial affairs when they become deprived of the mental capacity to do that for themselves. The scope of the power can include business and financial affairs; for example, the Attorney can access the Donor’s bank accounts or sell a property on the Donor’s behalf. The authority under the EPA can also be extended to personal care decisions, for example the Attorney can decide where the Donor should live or who they should live with. The Donor can also stipulate restrictions/conditions such as in relation to a sale of property or indeed in relation to matters of personal care.
The EPA places a very important obligation on the Attorney to act solely in the best interests of the Donor when making decisions whether they are of a financial or a personal nature. For example, an Attorney can sell a property on behalf of the Donor and use the sale proceeds to pay for care for the Donor. None of the powers can be used by the Attorney for their own personal gain.
The powers given to an Attorney under an EPA do not come into effect until such time that the Donor becomes mentally incapacitated. At that point, the Attorney should consult with our office and we will take the necessary steps to register the EPA in the Ward of Court office in the High Court. It is important to note that during the entire process, whether at the initial creation of the EPA or at the the registration of the EPA, we will work closely with the Donor’s treating medical practitioner and rely on their medical opinion. There are also safeguards in the legislation to prevent abuse and we take great care when taking instructions from the Donor to ensure that they are not under any undue influence.
Donors should consider the following practical points;
The most important aspect of an EPA is appointment of the right Attorney or Attorneys. An Attorney should be a highly trustworthy individual. In reality, Donors often appoint close family members such as their children as Attorneys. However, Donors are free to appoint whoever they wish. We will advise clients in relation to the appointment of Attorneys and suitability.
Notice of the EPA must be given to two parties, one of whom must be a close family member such as a spouse, child or sibling.
The Attorneys themselves will have to agree to act as Attorneys and acknowledge their obligations and duties in writing at the time the EPA is created. We will fully explain the nature of these duties to the Attorneys.
For practical reasons, it is beneficial for the Attorneys to have a general knowledge of the Donor’s assets, location, etc.
We encourage Donor’s to discuss their general wishes with their Attorneys as early as possible at a time when they are fully mentally competent.
Act quickly; the biggest pit fall is that the EPA is not created in time. It is important to remember that an EPA can only be created at a time when the Donor is mentally capacitated and fully understands the effect of creating the EPA. If a person loses their mental capacity it is too late to create an EPA. For these reasons, if a potential Donor is diagnosed with early onset of Dementia or Alzheimer’s disease, where appropriate, we recommend that steps should be taken to create an EPA without delay.
If there is no EPA created and a person cannot manage his or her own property because of mental incapacity, an application can be made to the High Court to make that person a Ward of Court. A committee is then appointed to control the assets on the Ward's behalf. This process is lengthy, complex and expensive. By comparison, an EPA provides a quicker, easier and less expensive solution to the same problem which also incorporates the person’s own wishes. However, as outlined above, it is paramount that the EPA is created in time.
Creating an EPA allows a Donor to consider their own wishes for the future at a time when they are mentally capable of doing so, in anticipation of a time when they are no longer competent. Considering the prospect of losing one’s own mental facilities is undoubtedly an uncomfortable thought. However, the resounding feedback from our clients who have created EPAs is that they bring a sense of peace of mind that comes with knowing that whatever the future brings, your loved ones will not be financially burdened by your future care needs. At BDM Boylan Solicitors we have extensive experience in advising clients on all aspects of EPAs to include;
Advising clients if an EPA is appropriate in their individual circumstances and explaining the benefits.
Advising clients on the procedures involved and preparation of all documentation in full compliance with the Powers of Attorney Act 1996 and the Enduring Power of Attorney Regulations 1996.
Registration of EPAs in the Ward of Court Office in the High Court, Ireland.
If you have any queries, please do not hesitate to contact us at 021 431 3333 or info@bdmboylan.ie