What happens if ill health robs you of your ability to look after your own interests during your lifetime?
Imagine that you jointly own your home with your spouse and your spouse becomes a victim of dementia, or suffers a stroke, or some other mentally disabling injury.
You need to sell your home because it is too big and you no longer have the time to maintain the house because you are looking after your spouse. You will not be able to sell the house because your spouse is no longer capable of understanding or signing the necessary legal documents. You will also not be able to obtain a loan if funds are needed to assist with your spouse’s medical care.
You will run into the same problem for other jointly owned property or bank accounts, except of course where either partner can sign for a withdrawal.
However you can get around this problem.
Most people have heard of a power of attorney - usually as a legal document for someone going overseas who wants some trusted friend or professional to sign for them in their absence. However this type of “general” power of attorney is automatically revoked if the person giving the power of attorney loses mental capacity.
By making an Enduring Power of Attorney and appointing an attorney well in advance of when you actually need the attorney to act for you, you can safeguard your interests and those of your family if illness or incapacity strikes. The Enduring Power of Attorney will operate even if the person giving the power later loses mental capacity.
The attorney takes on a high level of responsibility and must, by law, be an adult. You and your spouse might choose to make powers of attorney in favour of one another. In addition you could also appoint an adult child or children.
Obviously, you need to choose your attorneys carefully. They need to be someone you have complete faith and trust in.
Granting a power of attorney does not stop you from dealing with your affairs as you would normally - but the attorney will have concurrent rights. You can revoke the power of attorney at any time, even orally. However, It is better however to revoke the power in a formal way, preferably in writing.
Knowing you have an attorney capable of looking after your affairs in times of your absence or infirmity can give you peace of mind.
You should obtain proper legal advice before making a power of attorney. Your solicitor is the best adviser to ensure that all your requirements are covered and that there is a proper balance maintained between trust and caution.