If a person becomes mentally incapacitated, assets and property are frozen
Pat Hume, the wife of Nobel Peace Prize winner John Hume, recently spoke about her husband’s ongoing struggle with dementia.
She said her husband first became ill in the late 1990s, when he was speaking at a conference in Austria.
It is believed Mr Hume suffered some brain damage as a consequence of that illness.
Dementia affects more than 48 million people around the world and is fast becoming a major health challenge, with the numbers suffering from it expected to double every 20 years.
There is hardly a family in Ireland untouched by Alzheimer’s disease or other forms of dementia.
Aside from the trauma of dealing with these diseases the situation can be made even more stressful in the case of farming families if this situation has not been catered for legally, by creating an Enduring Power of Attorney (EPA).
In the absence of this, where a farmer is proven to be of unsound mind, he or she will be made a Ward of Court, where a judge has the power to make decisions on the farmer’s behalf.
Both property and money is brought under the control of the Court.
Few of us want to think that we might lose our mental capacity, or how we would cope with our financial affairs if we did.
If a person becomes mentally incapacitated, all of their assets and property are normally frozen and cannot be used or accessed by anyone else unless they are jointly owned, or someone has created an EPA to deal with their property or affairs.
It will make your everyday routine of paying bills, running a farm and making basic financial decisions impossible.
It would be particularly detrimental if you are the owner of a farming business.
One answer is to create an EPA, a legal tool which gives someone you trust the legal authority to make decisions on your behalf about your financial affairs and welfare, should you lose the mental capacity to do so.
An EPA is a legal document which only takes effect in the event that the person becomes mentally incapacitated.
The person creating the EPA is known as the Donor, and in the event of him or her becoming mentally incapacitated, the power to deal with the Donor’s money and assets transfer to the Attorney.
An EPA becomes operative only if you become incapable of looking after your affairs, and it continues in force until death.
An EPA is a little like a will, in that it enables the farmer to appoint someone of their choice to control their affairs, should they become mentally incapacitated.
In order to make an EPA, you must be mentally capable of doing so.
Your Attorney can be people such as your spouse, partner, parent, sibling or friend.
The choice of Attorney is a personal matter, but a great deal of thought needs to be given to the nomination.
Questions to ask are: is this person suitable for the job, do I trust them and do they have the skills to manage my farming business and make decisions for me?
This can be confined to personal care decisions, housing, running a farm, or managing bank accounts and so on — or it can encompass all.
By executing an EPA, you retain control over who has the responsibility of looking after your affairs.
The crucial thing is to set up an EPA while you are still mentally capable, well before you need it.
If you become mentally incapacitated later in life, and do not have an EPA in place, your relatives can face long distressing delays and expense in applying to Courts to take control.
Every farmer should enquire about creating an EPA with their solicitor, if they have not already done so. It is a relatively simple process, but it does require the services of both a doctor and a solicitor.
What happens if you change your mind?
The EPA can be revoked at any time before the farmer becomes mentally incapacitated. If you change your mind about having an EPA, or about your choice of Attorney, you should consult your solicitor immediately.
I am advocating that people view EPAs as an important part of planning for their family’s future.
I would encourage younger people in their 20s and 30s to talk to their parents about EPAs, and to consider creating an EPA for themselves particularly, if they play contact sports or go on adventure holidays.
EPAs are legal documents that can be set up relatively cheaply.
They are designed to be recognised by financial institutions, nursing homes, and local authorities. They should be looked on almost like an insurance policy.
It is there if you ever need it, and if it is never required, all the better.
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