A LEGAL SAFEGUARD WITH ENDURING APPEAL

The hardship and suffering faced by the loved ones of people suffering from Alzheimer’s disease were brought into sharp focus by the recent Prime Time Investigates and Frontline television programmes which were devoted to the issue. It’s not a pleasant exercise, but try to imagine that you were afflicted with this awful disease and that your loved ones were further handicapped by the fact that they could not make appropriate care decisions for you because they did not have the legal authority to do so.

While we can only hope that advances in medical science will eventually lead to the effective treatment of Alzheimer’s and other conditions like it, thankfully there already exists a straightforward and effective legal mechanism, in the form of an Enduring Power of Attorney (EPA), to ensure that those who care for you are properly equipped to make decisions and take actions on your behalf in the event that you become mentally incapacitated.

An EPA is a legal instrument which you create appointing people to look after your affairs if (but only if) you become mentally incapable of doing so yourself. Unless and until you become so mentally incapacitated as to be unable to look after yourself, the attorneys whom you appoint in the EPA have no legal authority whatsoever to interfere in your affairs.

You can impose as many restrictions and conditions as you feel appropriate, but generally an EPA gives a person’s attorneys authority to act on their behalf in relation to all of their property and affairs and gives the attorneys authority to take decisions on their behalf in relation to matters such as: where they should live; with whom they should live; whom they should see and not see; what training or rehabilitation they should get; their diet and dress; inspection of their personal papers; and housing, social services and other benefits for them.

An EPA is a very flexible instrument which you can vary as much as your personal circumstances require. For example, you can name any person in the EPA whom you would like your attorneys to consult so that the attorneys can have regard to that person’s views as to your wishes and feelings and as to what would be in your best interests before making any important decision.

EPAs are sometimes unhelpfully referred to as “living wills”. This could give the mistaken impression that an attorney acting under an EPA can give away your assets to third parties during your lifetime. In fact, nothing could be further from the truth, with the whole purpose of an EPA being to ensure that the person who creates it (namely you) is looked after. Your attorneys cannot use your money to make gifts unless you have included a specific provision to that effect in the EPA, and then only to persons related to or connected with you on birthdays or marriage anniversaries or to charities to which you made or might be expected to make donations. The amounts of any gifts or donations can be made subject to any restrictions in the EPA which you deem appropriate and, in any event, may be only for reasonable amounts in relation to the extent of your assets. Your attorneys will be obliged to keep adequate accounts of your property and affairs and they can be asked to produce these accounting records to the High Court if required. Unless you put a restriction in the EPA preventing it, your attorneys will be entitled to use your money or property to benefit themselves or other people. However, even if you don’t prevent them completely from using your assets in this way, they will still only be able to do so in a manner in which you yourself might have been expected to benefit any person were you capable of looking after your own affairs.

Another concern frequently expressed by people is that by executing an EPA they are somehow diluting their right to have absolute control over their own affairs. This is another misconception. If you make an EPA it will not come into force until it has been registered in the High Court Office of Wards of Court and this cannot be done until a medical practitioner has certified that you are no longer mentally capable of managing your property and affairs. Furthermore, both you and at least two other people nominated by you at the time you made the EPA must be made aware of the intention to register it so that steps can be taken to prevent the EPA taking legal effect in improper circumstances.

Perhaps the best way of illustrating the benefits of creating an EPA is to consider what would happen if you became mentally incapable of looking after your own affairs if you didn’t have such a safeguard in place. Suppose you have a house, some cash in the bank and a few investments here and there. Your mental capacity deteriorates to the extent that your loved ones believe that you need specialist treatment in an appropriate medical facility. They tell your doctor that they would like him to perform the treatment which he has recommended for you but he explains that this treatment is elective in nature and that only you can make this election. They go to your bank manager and ask for some of your money to pay for your stay in a nursing home but are turned away as she explains that she has no authority to pay this money out to any person other than you. They then go to your solicitor to examine the option of selling or renting out your house to come up with the funds, only to be told that the only person who can make decisions of that nature is you. In such a situation, your loved ones would ultimately have to make an expensive and time consuming application to the High Court to have you declared a ward of court. This process could take several months, with your family members having to scrape together the money required to maintain you in the meantime from their own resources.

Now consider the alternative situation where you have created an EPA (probably several years or even decades previously). Once the person you have chosen to look after you in the event that you become mentally incapacitated has formed the opinion that you are no longer able to look after your own affairs they will consult with your doctor and, if he or she agrees, the necessary steps are taken to register the EPA. This takes a few weeks and once it is done your bank manager, your solicitor, your medical professionals and anyone else who has an interest in your affairs can immediately act upon the instructions of your attorney.

While making an EPA was always a sensible thing to do, the recent introduction of the nursing home support scheme referred to as “A Fair Deal” is yet another good reason to put one in place. Under this scheme anyone admitted to a nursing home will have to make a contribution to the weekly cost of maintaining them in that home. The amount of this contribution is calculated by reference to the amount of income you receive and the value of the assets that you own.

Where any of your assets include land and property in the State, the contribution to your nursing home charges which you will have to make may be deferred and collected from your estate after you have died. Several benefits could arise from such a deferral, the first and foremost being that you would not be forced to go through the huge emotional trauma of having to sell your home during your lifetime to fund your nursing home costs. Another more practical benefit would be to enable you to defer selling any land or other properties which you own at a time (such as now) when the property market is depressed and the money which you might secure for any such sale is nowhere near what you would like it to be.

The deferral of the payment of contributions to nursing home charges is done by taking out what is referred to under the scheme as a Nursing Home Loan. In this case the HSE will pay the money to the nursing home on your behalf and it will then collect this money at a later stage. While the loan advanced by the HSE can be repaid at any stage (such as after the sale of an appropriate asset on the recovery of the property market) it will ultimately be recovered from your personal representatives after your death if it hasn’t been repaid in the meantime.

If you are not mentally capable of doing so yourself, the only person who can apply for a Nursing Home Loan on your behalf, other than a court-appointed care representative or committee, is an attorney appointed under an EPA created by you.

Just like making a will doesn’t bring about your early demise, creating an EPA won’t make you lose your mental capacity. Indeed we have had several clients who made EPAs during their lifetime who passed away without the need for the EPA to be registered ever having arisen. In those cases the EPA did nothing more than to give the individuals peace of mind by allowing them to live out their senior years safe in the knowledge that they had provisions in place to ensure that the hardship caused to both them and their loved ones would be minimized in the event that they ever became mentally incapable of looking after themselves.