Lasting Power of Attorney: What It Is, Why You Need One and How It Is Made
Your health is fine, but you worry that it may decline and that you may lose the cognitive capacity to make decisions? A Lasting Power of Attorney is an innovative legal instrument that lets you make important decisions well in advance.
By: Osnat Reich, Attorney and Notary
In 2016 an amendment to the Legal Capacity and Guardianship Law was enacted (Amendment No. 18, 5776-2016), in which the legislature addressed a pressing question: what happens to a person on the day they are no longer able to make decisions?! In effect, the amendment allows every person to sign a "Lasting Power of Attorney" and use it to decide in advance how their adult life will be managed if and when they reach a point where they can no longer manage it themselves.
The amendment allows every person to make a Lasting Power of Attorney while they are still competent and clear-minded, and through it to determine what will be done in all of their affairs in the future.
The Purpose of a Lasting Power of Attorney
Until the Lasting Power of Attorney became available, the law provided that when a person lost the cognitive ability to make decisions about their person and/or property, the court would appoint a guardian (a family member, or someone on behalf of the Administrator General / Official Guardian) to make decisions in their place.
The legislature recognized, however, that the law as it stood could infringe on every person's basic right to decide, while still alive, what will be done in their various affairs (financial, personal and medical) at a time when they no longer have the cognitive ability to make those decisions themselves.
For example: whether to stay at home or move to a care home; whether to sell the apartment or rent it out; whether to leave the money in the bank or invest it; whether to be connected to a ventilator or to forgo life-saving medical measures, and so on. It is important to remember that even when a court-appointed guardian has good intentions, the decisions they make may run contrary to, or conflict with, that person's own worldview.
The amendment was therefore designed to address this fundamental issue, allowing every person to make a Lasting Power of Attorney while competent and clear-minded, and through it to determine what will be done in all of their affairs in the future. In this way, the legislature prevented a situation in which a person is stripped of the free choice to decide financial and medical matters if and when they can no longer make decisions themselves.
What Are the Advantages of a Lasting Power of Attorney?
A Lasting Power of Attorney has many advantages, because it is made at a stage when the grantor (the person making it) is legally competent, lucid, clear-thinking and fully capable of making decisions. In effect, the grantor determines their own future and decides what will be done in every area of their life on the day they can no longer make decisions for themselves: decisions about daily functioning (including decisions about various physical activities); decisions about financial and bureaucratic matters (such as dealing with banks and authorities); medical decisions, and more.
The court, the Administrator General or any other person cannot object to the instructions in a Lasting Power of Attorney, unless those instructions involve breaking the law. In effect, the amendment allows a person to appoint their own attorney-in-fact who will make these decisions for them in the future, instead of the "default" guardian (the Administrator General) whom the court had appointed until now to manage personal and/or property affairs.
Another significant advantage is the right to revoke the Lasting Power of Attorney at any time. This is unlike the appointment of a guardian, which, once made, is very unlikely to be revoked.
What Is the Difference Between a Lasting Power of Attorney and a Will?
Many people wonder: do I need a Lasting Power of Attorney if I have already made a will? The answer is unequivocal: yes, you need a Lasting Power of Attorney!
The difference between a Lasting Power of Attorney and a will is that a Lasting Power of Attorney takes effect while the grantor is still alive but lacks the cognitive capacity and ability to make decisions about their property and/or person. A will, by contrast, takes effect only after the person's death. That is why it is so important to have both of these legal documents in place.
Choosing Your Attorney
As noted, the grantor can decide that the person they appoint (the attorney-in-fact) will handle all financial, property and personal decisions, explaining their instructions and expressing their wishes to them while still lucid.
The person making the Lasting Power of Attorney may appoint anyone they wish as their attorney-in-fact, whether a relative or someone outside the family. However, the law prohibits appointing as attorneys people with whom the grantor has a caregiving relationship, or on whom the grantor is professionally or financially dependent.
Because this role carries great responsibility and may at times lead to jealousy or tension between family members and the grantor, it is possible to appoint more than one attorney.
When several attorneys are appointed, the scope of each one's responsibilities and powers can be defined, as well as who will decide between them in the event of a dispute. For example: one attorney may have authority over financial matters, and a second attorney may have authority over medical decisions.
The attorney-in-fact must sign before a lawyer and declare that they agree to serve as attorney and undertake to act in accordance with the grantor's instructions.
The Lawyer's Role in Making a Lasting Power of Attorney
A Lasting Power of Attorney is drawn up and signed by the grantor before a lawyer who has completed special training authorizing them to handle such matters, provided the lawyer has no personal interest in the power of attorney.
The lawyer's role is to sit with the grantor and raise significant questions that may need to be addressed when the time comes, even if those questions are not relevant to them today. The lawyer walks the client through the issues that may arise in the future, so that the grantor can express their wishes in writing. In addition, the lawyer before whom the power of attorney is signed must explain to the person making it all of its implications, the relevant case law, and the existing alternatives to a Lasting Power of Attorney. Only after the person confirms by signing the document that they understand what granting a Lasting Power of Attorney means, and declares that they are doing so of their own free will, without pressure or undue influence, can the Lasting Power of Attorney be deposited with the Administrator General.
In summary: a Lasting Power of Attorney gives a person the freedom to decide, while still alive, what will be done in every area of their life should they lose the ability to make independent decisions. In this way, the law gives every person the freedom to choose, and also protects the wishes of those who will come under protection, before they do.
077-3506400/ 054-4900489/ 054-4922135