Enduring Power of Attorney
What is an Enduring Power of Attorney (EPA)?
The function of a will is to protect the post-death autonomy of the testator, taking effect only upon the testator’s demise. To safeguard autonomy during one’s lifetime, another legal tool is needed – the Enduring Power of Attorney (EPA).
An EPA is a legally binding document where the person signing it (also known as the donor) can appoint one or more trusted individuals as attorneys. These attorneys will have the authority to manage the donor's financial affairs in the event of the donor's mental incapacity.
'Mental incapacity' refers to the inability to handle and manage one's property and affairs, commonly due to conditions such as dementia, stroke, severe mental illness, traumatic brain injury, and cognitive impairment.
Our fees
Clients referred by Alongside will enjoy exclusive discounts provided by our collaborating law firms. The typical cost for a tailor-made EPOA (including arranging for a registered medical practitioner to witness the signing, and registration at the High Court) is around HKD 15,000 to 18,000.
The importance of an EPA
An EPA, when properly executed and upon registration, ensures that a person’s personal assets can still be managed by someone else, even if they lose mental capacity. The EPA is versatile, and its purposes include:
- Protecting the living standards of family members or partners (even pets) who are economically dependent on the donor. Through the EPA, the donor can specify that their property is to be used by the attorney to take care of these dependents, preventing their lives from being adversely affected due to the donor’s loss of mental capacity.
- Protecting the donor’s own interests. For example, the donor can specify that the attorney can use their assets to pay for their medical expenses or hire caregivers. The donor can also, by an EPA, allow the attorney to repay the mortgage loan to avoid the bank calling in the loan due to default.
Without an EPA, neither our family members nor our partners have any right to deal with or use our property if we lose mental capacity. This could create an economic crisis, especially if we are the breadwinner of the family. In such cases, to use or manage our assets, our family or partner would have to apply to the Guardianship Board for a guardianship order or to the High Court to appoint a committee of estate. This process is cumbersome and complex and might involve hiring a lawyer and incurring significant legal expenses.
Both alternatives have limitations. A legal guardian can deal with limited assets only. If the family and partner cannot agree on whom to be appointed as the committee of estate, it could add stress and potentially require the appointment of a professional (accountant or lawyer), incurring more costs. Since neither a guardian nor a trustee is chosen by the person who loses mental capacity, it’s likely that they might not be the person’s preferred choice.
What if I am afraid that the attorney will misuse my assets after I sign an EPA?
An EPA has various mechanisms and methods in place to regulate and monitor the attorney’s authority, ensuring the protection of the donor’s interests, including:
- The attorney must act in the best interests of the donor.
- The donor may appoint multiple attorneys to allow for mutual supervision.
- The donor can impose specific restrictions on the attorney’s authority under the EPA, such as that the attorney can only use or manage certain assets, or that the EPA will only come into effect after the donor loses mental capacity.
- The donor can stipulate whom must be notified before applying to the High Court for registration of the EPA, such as the donor themselves, other attorneys who are not involved in the registration, or any other people. The notification serves as a protective measure against potential abuse or misuse of the EPA.
- The donor can revoke the authorization under the EPA at any time upon regaining mental capacity.
How to make an EPA?
An EPA should be created in a specific statutory form and signed by the donor before a registered medical practitioner certifying that the donor is mentally capable. It also needs to be signed in the presence of a practicing solicitor. The attorney(s) must also sign the EPA as well. Afterward, the EPA must be registered at the High Court for it to take effect.
Alongside arranges for clients to visit our collaborating LGBTQIA+ friendly law firms. The law firm will directly obtain instructions from the client and draft, arrange the signing of, and register the EPA at the High Court as per the client’s instructions. Alongside would also arrange for a registered medical practitioner to assess the mental state of the client, and to certify that they are mentally capable of understanding the implications of the EPA at the time of signing, ensuring the validity of the EPA.
Limitations
It is important to note that a donor cannot give an attorney the power to make medical decisions on their behalf through an EPA. To achieve medical autonomy, another legal document is required – Advance Medical Directive.
Questions?
We are eager to hear from you and provide any assistance you may need. We look forward to connecting with you soon!