Estate Planning
Between Life and Death – Part II
Previously in Part I: we discover that there’s not only Life or Death. There’s also Between Life and Death.
(Missed Part I? Never fear. Click here to catch up.)
In your day-to-day drudgery, no-one knows your affairs better than you. And for good reason! Woe betide if anyone else is able to access your bank account, contact your creditors, and collect from your debtors. The world cannot be trusted! And if you’re dead? No problem. Your Will is signed, sealed and up-to-date, and your far-too-organised-for-her-own-good sister will clean up the mess as executor of your estate. But what if you’re neither alive nor dead? What if you’re stranded in a curious wasteland somewhere in-between? Life happens. And it happens suddenly. An accident or sudden illness can strike at any time, and you may find yourself fighting for your life for days, weeks, months, with no-one, not even your all-powerful physicians, able to predict when or whether you’ll return to the land of the living, and if you return, what state you will return in.
At this point it is left to your loved ones to ensure that your affairs don’t unravel as quickly as your health. In order to keep the vestiges of your life in order they need two things: Authority. And information.
Authority
When you’re faced with an uncertain hospital stay and recuperation period, your loved ones, with all the best intentions in the world, are faced with a limited number of options.
Curatorship
Our law recognises that, in certain circumstances, a person may reach a time in their life when they’re no longer able to deal with their own affairs. It’s at that stage that someone else, someone trustworthy and responsible, needs to be appointed to step in and organise your life for you. Admittedly, that someone may not necessarily be the person you would have chosen. In South Africa, the legal process of appointing a curator over your personal affairs entails an involved application for curatorship in the High Court. The judge will need to be persuaded that you are not of sufficiently sound mind, or not able, to sort out your own affairs. Supporting evidence from medical experts will need to be included in the application. A person who has an interest in your well-being and the well-being of your affairs will be put forward as the curator of your estate. If the judge grants the application, this person will have full power and authority to sort out your personal affairs on your behalf.
Given the length of time it takes to successfully bring about an application for the appointment of a curator, not to mention the cost involved, this is, understandably, not a decision that should be taken lightly. Such applications often also result in family squabbles, with many an application being derailed by disgruntled family members opposing the application, or opposing the appointment of the proposed curator.
An application for curatorship is usually brought about at a stage when you’re already too far gone to have any rational say in the matter, once it can be shown that you have little chance of recovery. But a curatorship application is not necessarily the optimum route during the initial few weeks or months following your mishap, during which your recovery, and the extent of such recovery, is still uncertain.
Powers of Attorney
Just because you’re in a full body cast for the next six months doesn’t mean that you can’t have some control over your personal affairs. While you’re of sound mind and able to make your own decisions in life, there is an option that you could consider: you could give a well-chosen and trusted loved one Power of Attorney over your affairs. Note reference to the words “well-chosen and trusted”! A Power of Attorney is not an authority that should be given blithely. You will become liable for all actions and decisions that are taken by your appointee within the parameters of the power of attorney. There are two options that you could consider, dependent on the circumstances.
General Power of Attorney: A General Power of Attorney is an all-encompassing authority that permits your appointee to claim from your debtors, pay your creditors, cancel your insurances, invest in the stock market, renovate your house, sell your car, sue your ex – and stops just short of selling your soul.
Special Power of Attorney: A Special Power of Attorney grants your appointee limited authority, in that the appointee may only do that which the SPA specifies. If the SPA permits your appointee to sell your car on your behalf, he cannot take it upon himself to sell your house. To his wife. At a quarter of the market value.
Given the powers that can be delegated, you should choose your appointee wisely. The person you choose should be someone who:
- understands you and the way you think
- will use your money and deal with your affairs wisely and in your best interests
- is trustworthy, and you are certain has total integrity
- is accessible for most purposes and is not too busy or disinterested to carry out this function
- is organised
- is reliable and who will not give up the appointment at the slightest sign of any challenges
- is reasonably competent in financial matters
- preferably resides in the same country (or, better, the same city) as you do
Thus, just because your doctor sees fit to prescribe interminable bed-rest, it doesn’t mean your life has to fall apart around you. Using a power of attorney you can grant authority to a saint who is willing to step into your shoes during your recuperation period. In this way you will be able to salvage some semblance of normality when you’re finally recovered.
And if you change your mind about the person you’ve appointed? A power of attorney can be retracted at any time you wish.
Enduring Power of Attorney
We have addressed Curatorship (where you are incapable of tending to your affairs) and Powers of Attorney (where you are of sufficiently sound mind to appoint someone else to tend to your affairs.) There is, however, one other matter to consider. The matter of your incapacity. Particularly where the duration of your incapacity and likelihood of recovery remain uncertain. For example, you may be in a coma following a car accident, and the extent of damage to the brain and likelihood of recovery may as yet be unknown.
Herein lies an unfortunate pit of despair in our legal framework – a power of attorney lapses on the incapacity of the principal from whatever cause. The basic tenet of powers of attorney is that they are limited to what the principal is capable of doing. If the principal loses the capacity to tend to his/her affairs, any powers of attorney that s/he may have granted lose their effect. Meaning the appointee, likewise, loses his/her capacity to act under the power of attorney.
In some jurisdictions the concept of an Enduring Power of Attorney is recognised. In a nutshell, an Enduring Power of Attorney is a Power of Attorney that contains an additional clause stating that the authority awarded will remain valid and enforceable even if the principal becomes incapacitated for whatever reason. Meaning the appointee can continue sorting out the principal’s affairs even if the principal has lost all sense of time, place, circumstance and reason. This concept is unfortunately not yet recognised in South African law. There is, however, a school of thought that, if challenged, an Enduring Power of Attorney may be upheld on the basis that failure to do so may constitute unfair discrimination on the basis of disability. To deny someone the right to identify and appoint a person to act for him/her during precisely the time of his/her life that s/he needs the assistance the most is unfair, and creates an unfortunate predicament for the incapacitated principal and the chosen appointee alike.
Thus, while you are still in control of your mental faculties, it may be prudent to sign a Power of Attorney that contains an enduring power of attorney clause, and keep this document in a safe place where it can be located and used by your trusty appointee in your time of need. Within our current legal framework, it is unlikely that the enduring power of attorney clause would be upheld, unless your appointee decides to challenge the position. But hopefully you’ll never need it. And if you do, it is hoped that by that time this gaping pothole in our law would have been filled.
(Side-note: It is clear that the current situation in our law regarding the lapsing of powers of attorney on the incapacity of the principal needs to be remedied. And it’s no secret either. In 2004 the South African Law Reform Commission undertook much research and produced a comprehensive report entitled: ‘Assisted Decision-making: Adults with impaired decision-making’. The report makes detailed recommendations, including in relation to the recognition of enduring powers of attorney. We live in hope that this report is dusted off and acted upon before another decade or two passes us by.)
Information
Possession of legally recognised authority is not enough. In order to put this authority to good use your trusty appointee needs information. Whether it’s the information that is stored in your brain, smartphone, laptop, safe, or under the faulty floorboard. While your appointee may not need the information now, s/he must know how to access it. If not in the event of your incapacity, it will certainly be needed upon your death.
Stay tuned for our final instalment as we explore the matter further.
In Summary: Being proactive in organising your affairs can make the world of difference should you find yourself incapacitated. If you’re looking for affordable, reasonably-priced legal documents – including a General Power of Attorney or Special Power of Attorney document – and an array of other legal documents that are easy to use and written in plain language, then have a look at our agreement templates here on Agreements Online.
Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.