We know that we need a will if we die, but what do we need if we become incapacitated?
We all have the right to make decisions about our personal affairs, but sometimes due to either illnesses or accidents, we lose the ability to do so.
Unfortunately, if you lose mental capacity, you cannot assume that relatives can access your financial affairs or make decisions about your healthcare. Your loved ones may have to spend time and money going through court to gain access or control.
You can avoid this by giving a family member or close friend Power of Attorney. Different countries have different ones and names. For Hong Kong, you can have a General Power of Attorney in place at any time. Still, you must have Enduring Power of Attorney in place if you lose mental capacity.
What is an Enduring Power of Attorney?
An Enduring Power of Attorney (EPA) is a legal document where someone nominates a trusted friend or relative to look after their affairs if they lose mental capacity.
Who should set up an EPA?
Regardless of health or age, everyone should consider setting up an EPA. It’s not necessarily dementia in old age that will affect your decision-making ability. Young people could lose capacity through an accident or severe illness, for example.
Others diagnosed with a condition likely to cause loss of capacity should consider who they would like to make their important decisions when they can no longer.
You must also have total capacity when appointing an attorney. When making an Enduring Power of Attorney in Hong Kong, a medical officer (family doctor) and legal practitioner (lawyer) must confirm that you have total mental capacity when signing. They no longer have to be present at the same time.
Why should you set up an EPA?
We all should have a Will, but this can only be dealt with when we die.
There may come a time when a qualified health practitioner assesses that we can’t make these decisions ourselves – from that point on, our attorney will have the power to act for us. As an alternative to it going into effect immediately, we can choose for the EPA to only come into effect if this happens.
Without an enduring power of attorney, no one else can deal with our property or financial affairs on our behalf without a court order. Our family, partner, or spouse may need the court to get this power. Not having an EPA can cause our loved ones a lot of (needless) stress and cost them a lot of money too.
Things our attorney can do for us include managing bank accounts, paying bills, paying school fees, or buying and selling property on our behalf – you can limit or widen their scope of control.
How do you set up an EPA?
An EPA is a separate legal document that has to be witnessed by a legal and medical practitioner and then registered with the courts so that if the attorney is needed – you can state when the attorney has to act – it is an instant process.
You should consider your attorney, who is very often our spouse (you can have more than one, and they can collaborate ( together) or jointly and severally (they can act together or independently)) and the duties under which they can perform. You should list these under your EPA. They do not have to have complete control and are “watched” by the HK legal system to protect your estate also.
You are also free to change your attorney/s at any time, but if the EPA is registered already, you would have to revoke the original and re-register using your new attorney/s.
We all need a Will to distribute our personal assets. Still, if your loved ones rely on your income, which is in jeopardy if you become mentally incapacitated, you should consider this valuable document to alleviate financial stress on your loved ones.
Key Advantages of an EPA
- a) it allows an individual to choose the person/s who will look after their financial affairs if they become incapable of doing so
- b) it avoids expensive and potentially distressing court proceedings for the appointment of another person to look after the individual’s affairs
- c) it provides an efficient and cost-effective way of administering the individual’s property
- d) it allows your loved ones ease of mind that they can manage your finances, looking after you and themselves
Please feel free to contact us at www.careysuen.com if you have any questions.
