Hello again and welcome to our latest On The Money newsletter on personal finance. This week we’re going to consider a subject we spend a lot of time avoiding – what will happen if I suffer a catastrophic illness or injury and can no longer make the most basic decisions about my life?
As a species we are resolutely optimistic, overly so. We never countenance that there might come a point when we are not in full control of our faculties, and so we never plan for it. Yet an accident, a stroke or even the relentless decline into dementia can all rob us of our cherished independence.
If we are lucky, it is not something that will arise but given the odds, especially in a population that is living for longer, it makes sense to plan ahead. Not least because you can otherwise find yourself in desperate need of such an arrangement when it is too late to organise. Irish nursing homes and hospitals are full of people who assumed they would die at home in their own bed, quietly and serenely, and functioning more or less fully until those last moments.
It is thus basic common sense to arrange for what is called an enduring power of attorney (EPA) – a legal document where you nominate one or more people you trust to make decisions about your finances and personal care. When? Now, regardless of your age, really. Calamity is no respecter of your relative youth.
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It only comes into force if a doctor agrees that you are no longer able to make those decisions for yourself and it operates now under the Assisted Decision Making (Capacity) Act 2015, which came into force last April and is designed to protect the rights of vulnerable people.
And while you are at it, you might also consider drawing up an advance healthcare directive outlining what medical interventions you do and do not want if you are not in the position to make such views known at the time.
If you are one of the hundreds of thousands of Irish adults who has yet to draw up a will, this would be a good time to do that as well. Once done, you can leave all these “insurance policies” on file and forget about them, comfortable in the knowledge that if a crisis arises, you are prepared.
Two-part process
There are a few stages in organising an EPA, which can be broken down into two broad stages: drawing up an EPA and activating one.
Each requires close attention. A case in the Irish courts this week illustrated how the precise wording of an enduring power of attorney can affect the decisions those you trust (formally called attorneys in this context) can and cannot make for you.
The first thing you need to decide is who you wish your attorneys to be, how many, and whether they must agree on any decision for you or can act independently.
For many people, their first choice will be a spouse and/or adult child(ren) but there is nothing to say it cannot be a friend or other relative. It is quite normal to have more than one person – especially in a world where people may move abroad for work, travel or family reasons. Ideally you want at least one of your attorneys close to hand as day-to-day decisions need to be made.
Make sure they are happy to act in the role: not everyone is. You might also consider naming backup attorneys in case one or more of your preferred attorneys predeceases you, gets ill themselves, or is no longer living anywhere close to you when the time comes that you need them.
Then you need to consider what power you want them to have. This was critical in the case mentioned above that was in the courts this week.
Given this is only an issue when you are no longer able to act for yourself, it generally makes sense to give your attorneys power over your financial and property affairs.
This would include control of your bank accounts and power to pay your debts, including for your care and even your taxes as they arise. They could also apply for social welfare or, if required, a Fair Deal nursing home subsidy on your behalf. It would also allow them buy or sell property – most likely if such a sale were needed to fund your own long-term healthcare costs.
Then there is the area of personal care. This covers issues like where you should live, your personal care regime, what activities you might or might not be involved in and even things like who you meet, your clothes and meals etc.
It’s a sensitive area, as the court case proved, and not something to simply consider in passing. It is important to bear in mind that if your attorneys do not have control of your personal care, and you cannot do so, someone else – most likely a hospital or healthcare provider that may not know your preferences nearly as well – will have the final say.
Then you get on to the more legal, formal side of things.
The EPA will include a signed acknowledgment from you that you understand what you are doing in creating an enduring power of attorney.
It will also require a statement from a doctor, generally your GP, that you have the mental capacity at the time the document is drawn up to understand what is happening. A solicitor, separately, will also have to attest that you know what you are doing and that you are not acting under undue influence.
The chosen attorneys will also have to sign to accept that they understand their obligations in becoming an attorney. Like a will, the EPA then needs to be witnessed by two people unconnected to the arrangement.
There is then a formal notice process where any spouse or adult children other than those selected as your attorneys are notified that you are setting up an enduring power of attorney. They have five weeks if they choose to object but can only do so on very limited grounds.
The document is then registered with the Decision Support Service. This is a new Government agency and replaces the need for EPAs to be lodged with the High Court, which was the arrangement up to now.
The EPA rests untouched unless your personal circumstances dictate that it is needed. To activate an EPA, your chosen attorneys will need to approach the Decision Support Service and get forms that will need to be completed by a doctor to say you are no longer capable of managing your affairs.
The attorney(s) will then assume control though they need to provide a written report annually to the Decision Support Service outlining, among other things, details of any costs or expenses incurred by the attorneys in their role.
Once activated, the attorneys will need to contact companies you regularly deal with, such as utilities, to notify them that they now speak for the “donor” – the person who entrusted them with the role when the enduring power of attorney was drawn up. They might have bills redirected to their addresses for ease of payment.
They also need to notify any banks the donor may have ongoing business or accounts with.
This all should be a straightforward process but sometimes it does not run smoothly.
Generally, utilities will want a formal copy of the activated enduring power of attorney for their records. They might also want formal proof of identity (a passport or driving licence generally) for the attorneys and possibly for the donor, and also proof of address (a bank statement, Revenue notification or utility bill).
It helps to make sure you have all the documents gathered together before embarking on this process, especially with the banks who will, in my experience, want to see you in person. Also make sure that everyone you deal with has your full contact details – phone number, address and email in case any issues arise that need checking.
This is a process I had reason to go through not so long ago and, generally, it went very smoothly.
The exception was one of the banks, unfortunately the one where the person’s main current account was held. All banks said the process would take “at the outside” two or three weeks. And, to be fair to them, with one exception, it did.
Unfortunately, a month after having handed over the necessary paperwork, Bank of Ireland conceded they had not even started processing it. There was some suggestion an issue had arisen but no attempt had been made to contact us over anything. Meanwhile bills were outstanding.
The frustration here for customers is that they can feel powerless in the system. I have to say the people I was dealing with were fine but the office dealing with such legal matters is remote, faceless and inaccessible for direct communication.
My advice: persevere, escalate up the management chain and put everything in writing – even written confirmation of the content of phone calls. Demand to see named managers rather than the unfortunate front counter staff who are very helpful but have no real power.
In this case, it was resolved fairly quickly and the bank accepts there were gaps in their process which, they assure me, will be addressed to make sure others do not have the same experience.
But it all shows that you do need to be organised, committed and aware of the effort that may be involved if you take on such a role.
Medical decisions
While enduring power of attorney does grant some one or some people significant control over your affairs, it does not extend to medical decisions.
The Assisted Decision-Making (Capacity) Act 2015 – which took until April last year to come into force – introduced the concepts of such advance healthcare directives into law for the first time although they were accepted as legal under common law here at least back as far as a Supreme Court judgment in 1996.
An advance healthcare directive does two important things. First it lets you state specifically any treatment that you do not want – such as that you not be resuscitated, or perhaps not ventilated. You need to be quite specific here so it might be worth taking advice.
It’s important to note that while you can state what you do not want to happen, you cannot demand certain treatments, although you can request them.
Secondly, the directive also lets you nominate someone you trust to act as your designated healthcare representative to advise on and interpret your wishes when you are not in a position to dictate your wishes for yourself.
This can be the same person as you choose to act under an enduring power of attorney but does not have to be. It can be someone else entirely.
Doctors and other healthcare professionals are obliged to consult your advance healthcare directive if you lose the ability to make decisions about your treatment and the process is again overseen by the Decision Support Service.
And the costs? Under the new arrangements with the Decision Support Service, registering an enduring power of attorney costs €30 and activating it will cost €90. There will clearly be additional costs in getting legal and medical corroboration of your fitness to agree such a document.
There is no charge for an advance healthcare directive.
You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter, you can read it here.
