Although many people are aware of the importance of executing and updating wills, many of them often neglect to prepare for accidents, cognitive impairment, stroke or other serious illnesses. For example, in the event that a person loses mental capacity, who can withdraw money from his/her bank to pay for all the medical bills?
In Hong Kong we have an interesting concept (now passed into law) that as far as we are aware does not as yet apply in other countries. It helps to relieve the anxieties of many who have reached a certain stage in life and indeed, should be considered at any age. What happens to people in the event that they lose all mental capabilities? We can offer a solution to help such people, and to provide the affected persons and their families with financial arrangements should any such unhappy circumstances occur. An EPA (Enduring Power of Attorney) will resolve this situation.
So what is an EPA? It is a simple, straight-forward and effective legal arrangement that allows person A to appoint another person B (who is completely trusted by A), to take care of A’s financial affairs and manage A’s assets in the event that A becomes mentally incapacitated. This can avoid unnecessary lengthy legal proceedings and costs when managing A’s financial affairs in the future.
- Any person (including family members, friends or professionals) or professional trust corporations may be appointed. If the attorney to be appointed is an individual, he/she needs to be over 18 years old, have no bankruptcy records and be mentally capable. To avoid any possible conflict or arguments between the persons (e.g. siblings) to be appointed attorneys, it may be a good idea not to discuss or reveal the decision of the person executing the EPA. As an experienced lawyer, I would prefer that professionals or trust corporations be appointed. Should circumstances change with regard to any of the named attorneys, then a new EPA needs to be executed. Please be reminded that registration of any EPA must be made with the High Court or an equivalent respected organisation to safeguard the intentions of the person executing the EPA.
- One can appoint two or more attorneys so that they can help or monitor each other.
Assets or financial transactions
Please specify the particular issues, assets, or financial matters that need to be addressed, such as all of the below, or only one or more:
- To collect income and/or capital;
- To sell movable property (e.g. cars, jewellery, or other precious assets);
- To sell, lease and/or surrender home and/or immovable assets; and
- To use income and/or capital
Witnesses for signing of the EPA
Apart from a lawyer, the person ought to appoint his/her family doctor to be a witness, or lawyers can introduce a registered doctor to witness the signing of the EPA.
When does an EPA take effect?
One can choose:
- the date of execution of the EPA before a solicitor;
- on a later specified date; or
- when a specified event occurs.
Registration of the EPA
EPA must be registered at the Hong Kong High Court before it can become effective. Banks and other financial institutions will only accept registered EPA for financial transactions.
As a lawyer, I am strongly of the opinion that EPAs should be made available in as many countries as possible, and it is up to us as lawyers to lobby for this. I have personally seen how the anxieties of the person giving the EPA have been relieved. EPA enables people to enjoy life to the fullest, without worries about what may or may not happen in the future.