Powers of Attorney and Wills featured prominently as matters of concern and interest to seniors at the recent Age Concern Legal Clinic hosted by MJM Limited
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This year’s event marked the seventh legal clinic that MJM Limited has hosted with Age Concern, a registered charity (#561) dedicated to meeting the needs of seniors in the local Bermuda community. Attendees were able to participate in a seminar on essential estate planning tools, which was led by MJM Director Hil de Frias, as well as attend interview sessions with individual attorneys from the firm.
Here’s a short 6 minute video about the event: Age Concern Bermuda and MJM present the 2013 Annual Free Legal Clinic (video).
Two of the more pressing items that were identified during this year’s legal advice sessions were Powers of Attorney and Wills. My colleague Emily Deane and I have written on Wills in recent posts Advantages of using an Attorney to prepare your Will and With a Will There is a Way so this article will focus on the value of Powers of Attorney.
A simple Power of Attorney can be for a specific instance or limited period (e.g. when one must travel abroad at short notice or in an emergency and appoints another to execute a contract on his behalf whilst abroad) or for a longer period of time.
The more formal Power of Attorney is a legal instrument where an individual (the “Donor”) grants authority to an agent (the “Donee”) to act on his or her behalf; the requirements for a Power of Attorney (the “POA”) are governed by the Powers of Attorney Act 1944 (the “Act”). Bear in mind that although the word attorney is used, it is not synonymous with a lawyer or one who provides legal advice.
For more security and assurance, the Donor can appoint more than one Donee to act on his or her behalf to manage the Donor’s affairs. The requirement of such an appointment may be that the Donees are to work jointly, which means that one Donee cannot make a unilateral decision but rather that all Donees have to make a decision collectively. Great care and thought should be given to the decision as to who to appoint as a Donee as it is a position involving a great deal of trust.
In the event a Donee has been appointed under a Power of Attorney, the Donee’s authority ceases once the Donor has lost their legal capacity. To ensure that the Donee’s authority continues once the Donor becomes incapacitated, an Enduring Power of Attorney (the “EPOA”) should be prepared and executed by the Donor.
An EPOA will typically cover all decision-making instances, such as banking transactions, property management and even issuing court proceedings on behalf of the Donor. An EPOA is of particular importance and use in helping to ensure that the affairs of the Donor can still be managed if and when their capacity (the ability to make decisions) is lost.
An EPOA is made when an individual has legal capacity and takes effect from the date of signing or when the Donor becomes incapacitated; this will be the Donor’s decision. If there is a question as to capacity it is advisable for the Donor under an EPOA to be assessed by a qualified medical practitioner. Once the practitioner concludes that the Donor has capacity a brief letter should be written to the Donor’s lawyer indicating that the Donor has capacity to appoint someone to act as their Donee under the EPOA.
Once executed the POA or EPOA are registered at the Registry General of the Bermuda Government. Either document can be revoked at any time; the revocation must take place while the Donor has capacity.
In the event an individual has lost their legal capacity (the “Patient”), and they do not have an effective EPOA in place, a Receiver can be appointed by the Courts to manage the affairs of the Patient (the “Receiver”), as guided by section 54 of the Mental Health Act 1968. To appoint a Receiver an application is made to the Supreme Court. Typically the Receiver will be a family member of the Patient but is not a requirement.
Both the Donee and Receiver are obligated to provide an accounting on the management of the Donor or Patient’s real and/ or personal property. The Donee’s obligation is guided by section 10 of the Act and the Receiver will be ordered by the court to provide an accounting to the Supreme Court Registrar annually so that the courts are satisfied that the affairs of the Patient are managed in an appropriate way. In both instances the authority of the Donee and the Receiver cease on the Donor’s or Patient’s death.
While we have just provided an overview on Wills and Powers of Attorney on our blog, they were just two issues highlighted by attendees. It is, however, advisable that all individuals, regardless of their age, seek good quality legal advice on issues or questions that they may have as it relates to their estates and affairs.
MJM looks forward to continuing its work with Age Concern in the future as together we meet the needs of our local community.