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A Home In the Village? Retirement Village issues

Powers of attorney have been around in our English based legal system for hundreds of years.  Knights setting off to the Crusades in the twelfth century appointed trusted friends or relatives to look after the castle and estate during their lengthy absence. This traditional power of attorney is still widely used today mainly for business purposes. 

 

However, the common law always provided that if the appointer lost the mental capacity to make decisions, the power of attorney came to an end.  The theory is that you could hardly say that you were acting on behalf of someone else if that person was incapable of giving instructions or approving the actions undertaken in their name. To overcome this situation we now have enduring powers of attorney that remain (endure) in force even though the appointers no longer have the mental capacity to act in their own affairs.  Enduring powers of attorney are a creation of The Protection of Personal and Property Rights Act 1988 and their form and legal function is regulated by that Act.  The Act also gives the Family Court the power to review how enduring powers of attorney are being used and even to cancel them.

 

Enduring powers of attorney are immensely useful but are at the same time a source of major concern and potential abuse.  In simple terms, if you give an enduring power of attorney to someone while you are mentally capable, then if at a later date you become mentally incapable of handling your own affairs, there is a trusted person who you have personally selected who can handle your affairs.  If you have not made an enduring power of attorney an application to the Family Court may be required to appoint a welfare guardian and/or a property manager.  This procedure can take months to go through the court system and be rather expensive.  If there is a dispute in the family over who is the most suitable person to look after your property, major battles and family disharmony can occur. Also the person eventually appointed by the Court to act may not be the one you would have personally chosen if able to do so.

 

Lawyers generally recommend that all people, certainly by the time they reach mid-life, should have enduring powers of attorney in place.  Often it is a good idea to do them at the same time you prepare or update your will.  With an aging population and many of us living to a ripe old age, the risk of suffering from senile dementia, Alzheimer’s, or even having a disabling stroke in later life is an increasing possibility. An enduring power of attorney is a safeguard for the future.

 

There are two types of enduring powers of attorney.  The first one deals with personal care and welfare issues.  Your attorney may be called upon to decide where you live, approve any medical treatment you require and generally deal with issues that relate to your personal care. For this power of attorney only one person can be appointed to act and it can only be used if you actually become mentally incapable of making your own decisions.  The second type relates to property issues. Here you can appoint more than one attorney to act for you.  The property power of attorney can be worded so it can operate even while you are mentally capable and still remain in force if later you lose mental competence.  This can be useful for someone who is mentally alert but perhaps physically frail and would like an attorney to handle their affairs as a matter of personal convenience.  In any power of attorney careful thought needs to be given to the extent of the powers to be granted and any limitations to be imposed.

 

It is crucial to appoint the right person to act as your attorney.  Someone who is both businesslike and completely trustworthy is required.  Also the attorney should be sympathetic and able to deal patiently with an appointer who is likely to be disabled and possibly confused.  Often it will be a good idea to appoint more than one attorney to deal with property issues, perhaps even appointing a trusted professional adviser as a joint attorney.  Unfortunately, it cannot be naturally assumed that a close family member will always act in your best interests.  Sadly there have been many examples of children trying to get their hands on “their inheritance” while Mum or Dad is still alive but significantly disabled and vulnerable.

 

Having an enduring powers of attorney filed away with your will is an effective and cheap way of future proofing your life.  The secret is to make them long before you might ever need them and to carefully choose the right attorney.

 

 

Disclaimer: The information contained in this article is of a general and summarised nature only.  It should not be used as a substitute for obtaining personal legal advice.

 

 

© Terry Carson 2008

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