Re­cent amend­ments to the Civil Code

En­dur­ing or Last­ing Pow­ers of At­tor­ney that sur­vive in­ca­pac­ity

Malta Independent - - COMMENT - An­thony Cre­mona An­thony Cre­mona LL.D., M.A. (Fin. Serv.), Mag. Jur. (Intl Law) TEP Dr Cre­mona is a part­ner of, and heads, the Trusts and Foun­da­tions De­part­ment of GANADO Ad­vo­cates. He is a lec­turer on the sub­ject of trusts, foun­da­tions and fidu­ciary obli


Not many peo­ple ask them­selves what might hap­pen if one day they were to be­come men­tally in­ca­pable and thus lack the ca­pac­ity to en­ter into any form of con­tract. Who would take care of them and how would they con­tinue to ad­min­is­ter their prop­erty? How will doc­tors and med­i­cal fees be paid? Res­i­den­tial care also, maybe.

The ben­e­fits of draw­ing up a will in or­der to pro­vide for per­sons af­ter one’s death and the wind­ing up of one’s af­fairs are widely recog­nised. How­ever, with the risk of su­per­ven­ing men­tal in­ca­pac­ity, with the ad­vent of longevity (and the pos­si­bil­ity of ill­ness or ac­ci­dent), in the midst of hec­tic sched­ules, the op­por­tu­nity to plan ahead of time for fu­ture hap­pen­ings is one that should not be over­looked. There may come a time in a per­son’s life when one will no longer be able to man­age one’s own af­fairs, and would thus need an­other per­son to do so for them. The Alzheimer’s As­so­ci­a­tion of the United States es­ti­mated in 2015 that one in nine peo­ple over the age of 65 suf­fers from Alzheimer’s (be­ing the most com­mon cause of de­men­tia) with the fig­ure go­ing up to one in three for the over-85 age bracket.

Whereas ‘pow­ers of at­tor­ney’ – or man­dates (‘prokura’ in Mal­tese) – have been around for cen­turies (ever since the time of the Ro­mans) and are there­fore con­cepts that we are well fa­mil­iar with, the so-called ‘En­dur­ing Power of At­tor­ney’ – or ‘Last­ing Power of At­tor­ney’, as it is also known in Eng­land – on the other hand, has only re­cently been in­tro­duced through Ar­ti­cle 1864A of the Civil Code.

This states that a per­son of full age (be­ing the manda­tor) may now give a man­date to an­other per­son (be­ing the man­datary) in an­tic­i­pa­tion of in­ca­pac­i­ta­tion. The law speaks of an ap­pointed man­datary in the sin­gu­lar, sug­gest­ing that joint or sev­eral at­tor­neys can­not be ap­pointed un­der Mal­tese law, which is un­for­tu­nate be­cause hav­ing more than one at­tor­ney gen­er­ally pro­vides less op­por­tu­nity for abuse and ex­ploita­tion than hav­ing a sin­gle at­tor­ney ap­pointed (not least be­cause it also per­mits a com­bi­na­tion of at­tor­neys to be ap­pointed, such as a fam­ily mem­ber and some­one in­de­pen­dent of the fam­ily, or pos­si­bly hav­ing a dif­fer­ent at­tor­ney ap­pointed for dif­fer­ent as­pects of the LPA – such as the prop­erty as­pect, and the care and wel­fare as­pect).

Sig­nif­i­cance of the EPA/LPA

Prior to the in­tro­duc­tion of EPAs, a man­date or ‘prokura’– which is a con­tract whereby a per­son gives to an­other the power to do some­thing for him – would typ­i­cally ter­mi­nate once the per­son grant­ing it loses men­tal ca­pac­ity. This ren­dered them to­tally use­less in the con­text of the in­ca­pac­ity of an el­derly per­son, for in­stance – just when they are most needed.

As a con­se­quence, in re­sponse to the above ques­tions, be­fore the in­tro­duc­tion of the new Ar­ti­cle 1864A, the ap­point­ment of an at­tor­ney post in­ca­pac­i­ta­tion – or the con­tin­ued use by an at­tor­ney of a POA post in­ca­pac­i­ta­tion - could not take place, and a lengthy process stood in the way, re­quir­ing the fam­ily mem­bers of the in­ca­pable per­son to ap­ply to court to de­mand the in­ca­pac­i­ta­tion of the per­son con­cerned and the ap­point­ment of a cu­ra­tor.

This process was of­ten a cause of anx­i­ety for the fam­ily mem­bers be­cause of the stigma that a dec­la­ra­tion of in­ca­pac­ity tended to bring with it – be­sides, the process can be cum­ber­some, costly and also takes away from the grantor the pos­si­bil­ity of in­volv­ing him­self in the se­lec­tion of who ad­min­is­ters his as­sets.

Post-Ar­ti­cle 1864A, this whole process can now be avoided through the sim­ple prepa­ra­tion of a pre-planned En­dur­ing Power of At­tor­ney, the main ben­e­fit of which is that un­like the nor­mal POA, the EPA does not ter­mi­nate on the in­ca­pac­ity of the grantor.

The whole con­cept of the En­dur­ing Power of At­tor­ney re­volves around the fact that a per­son of full age (and ca­pac­ity, at the time the EPA is drawn up) is given the fa­cil­ity to ap­point some­one whom he con­sid­ers to be trust­wor­thy to act on his be­half, take care of the ad­min­is­tra­tor, and ad­min­is­ter his as­sets, in the event of the grantor be­com­ing un­able to do so him­self - it can be used as a form of ‘in­surance’ against one’s in­ca­pac­ity; as a form of pre­cau­tion.

There­fore, by means of an EPA, a per­son, in an­tic­i­pa­tion of los­ing his men­tal ca­pac­ity, is given the op­por­tu­nity to ‘tai­lor make’ con­di­tions or re­stric­tions via a per­son of his choice to en­sure that fu­ture de­ci­sions which may need to be taken, in re­la­tion to, for ex­am­ple, the ad­min­is­tra­tion of his prop­erty and/or fi­nances, will be taken care of ac­cord­ing to his wishes.

Scope of the EPA/LPA: prop­erty ad­min­is­tra­tion and care of the grantor

His­tor­i­cally, in com­mon law coun­tries, the Last­ing POA re­placed the En­dur­ing POA that was nar­rower in scope. While the for­mer EPA was sim­ple to ad­min­is­ter, it failed, how­ever, to pro­vide for some de­ci­sions that may have to be made in cir­cum­stances where the per­son con­cerned does not have the men­tal ca­pac­ity to be able to make them him­self. In par­tic­u­lar, with the EPA, the at­tor­ney’s pow­ers were largely re­stricted to money and prop­erty de­ci­sions, and were not re­lated to de­ci­sions on med­i­cal mat­ters such as the con­tin­u­a­tion or other­wise of life-sus­tain­ing treat­ment, or wel­fare mat­ters such as a move to a dif­fer­ent kind of ac­com­mo­da­tion. In­so­far as the rel­e­vant Mal­tese pro­vi­sion em­pow­ers the man­datary to “take care of the manda­tor or to ad­min­is­ter his prop­erty” it would seem that the Mal­tese in­stru­ment is more akin to the broader LPA than the nar­rower EPA.

It would seem, there­fore, that the Mal­tese EPA can be used both in re­spect of prop­erty ad­min­is­tra­tion mat­ters, such as the ad­min­is­tra­tion of a bank ac­count, the pay­ment of bills, the buy­ing or sell­ing of in­vest­ments or the pur­chase or sale of a prop­erty, as well as mat­ters re­lat­ing to the care of the donor, such as the type of health care and med­i­cal treat­ment, res­i­den­tial care, as well as day-to-day mat­ters such as the grantor’s diet and daily rou­tine. Ul­ti­mately, whether the Mal­tese EPA will also cover life-sus­tain­ing treat­ment will de­pend on how broadly or nar­rowly the courts will in­ter­pret the “care of the manda­tor.”

END OF PART 1 – in Part 2 we will ex­plore how trusts and Last­ing Pow­ers of At­tor­ney can com­ple­ment each other. We will also ex­am­ine the for­mal­i­ties that must be sat­is­fied in or­der to validly is­sue a Last­ing Power of At­tor­ney as well as the safe­guards that ex­ist against pos­si­ble abuse by the at­tor­ney.

Newspapers in English

Newspapers from Malta

© PressReader. All rights reserved.