Enduring Powers of Attorney and the end of All or Nothing

Author: Thomas O'Malley and Frank Cunningham

November 20, 2018

Enduring Powers of Attorney (“EPA”), often called “Living Wills” are a helpful way for a person (the “Donor”) to plan for the future effective handling of his or her estate at a time when they no longer have the mental capacity to do so.

EPAs – 1996 Act

EPA’s are currently governed by the Powers of Attorney Act, 1996 (the “1996 Act”). People, due to the publicity and awareness of dementia and the impact of illness, are becoming increasingly aware of the benefits of creating an EPA. In short, an EPA, once registered, allows for the estate of the Donor to be managed by one or more “Attorneys” chosen by the Donor.  This power can range from managing bank accounts, day to day care, up to the selling of real estate and management of sales proceeds.

When considering whether to create an EPA, it is important to note the safeguards in place in the drafting, finalising and eventual registration of the EPA.  These include, but are not limited to the following:

  1. Medical examinations:
  • The Donor must be assessed by a medical practitioner at the time of creating the EPA to ensure that they had full mental capacity.
  • Further, the Attorneys cannot register the EPA without the Donor being medically assessed once more to ensure that their then physical and mental state merit such registration.
  1. Notice Parties
  • The Donor of the EPA must, at the time of drafting, nominate at least two persons who are to be notified of the creation of the EPA. These Notice Parties cannot be the Attorneys themselves, thus acting as an independent check and allowing for objections to be raised in case of, for example, suspected ‘undue influence’.
  • The Notice Parties are notified once more when the Attorneys proceed to register the EPA.

In spite of the above, many people continue to be uneasy about creating an EPA. This unease has traditionally been a result of the “all or nothing” approach to estate management.  i.e., before the registration of the EPA the Donor is in full control of their assets whereas after registration they are divested almost completely of the autonomy to manage their own estate.

Legal Developments – 2015 Act

It is in this light that we turn now to The Assisted Decision Making (Capacity) Act, 2015 (the “2015 Act”) and the changes it will introduce once fully implemented. It is anticipated that the Act will be fully commenced by the first quarter of 2020.

The Act represents something of a seismic shift in terms of the capacity support models which are available in this jurisdiction.  The main changes introduced by the 2015 Act are set out below:

  1. Enduring Powers of Attorney
  • When Part 7 of the 2015 Act is commenced, no new EPAs can be created under the 1996 Act.
  • However, until the 2015 Act commences, EPAs will continue to be created under the 1996 Act. In this regard, the 1996 Act will continue to apply even if the EPAs come into effect (i.e. are registered) after the commencement of the 2015 Act.
  • Once Part 7 of the 2015 Act is commenced, the Donor is entitled to revoke an EPA created under the 1996 Act and can create an EPA under the 2015 Act. Reasons why a Donor might wish to do this include, but are not limited to the following; 2015 EPAs contain additional safeguards, there is suitability and eligibility criteria for Attorneys, 2015 EPAs have the ability to deal with healthcare matters and Attorneys appointed under 2015 EPAs will be supervised by the Director of the Decision Support Service in the exercise of their functions.

Despite reforms under the 2015 Act, concerns surrounding EPAs still remain, in that the ‘all or nothing’ approach to capacity has been retained. In this regard, the 2015 Act proposes new types of decision-making support options to respond to the range of support needs that people may have in relation to decision-making capacity. These options are discussed below:

  1. Decision Making Assistance Agreement (“DMA”)
  • Under the DMA, a Relevant Person (i.e. someone whose capacity is in question or whose capacity may be shortly called into question) can appoint a Decision Making Assistant to assist them in the making of a decision in respect of their personal welfare or property and affairs, or both.
  • The Decision Making Assistant will be responsible for gathering information for the Relevant Person on a decision to be made, explaining the decision, its consequences, alternatives etc. Ultimately, however, it is the Relevant Person’s sole decision and the Decision making Assistant cannot make any attempt to influence this.
  1. Co-Decision Making Agreement (“CDMA”)
  • The responsibility of the Co-Decision Maker is similar to that under the DMA, with the addition that decisions are made jointly with the Relevant Person and the Co-Decision Maker, i.e., should a document, agreement, deed etc. require execution, it will only be valid once both the Relevant Person and the Co-Decision Maker have executed it.
  • An important note for legal practitioners here is that, though they are entitled to assume the capacity of the party on the other side of a transaction, the prudent approach may be to conduct additional searches on completing a property transaction to ensure that no such Co-Decision Making Agreement was registered with the Director of the Decision Support Service.
  1. Decision Making Representation
  • For the small minority of people who are not able to make decisions even with help, the 2015 Act provides for the Circuit Court to appoint a Decision-Making Representative (“DMR”) to make decisions on behalf of a Relevant Person.
  • This type of capacity support model echoes the previous ‘all or nothing’ approach. However, the DMR must abide by the guiding principles under the 2015 Act and must reflect the person’s will and preferences where possible.
  1. Advanced Health Care Directive (“AHCD”)
  • The purpose of the AHCD is to enable a Relevant Person to be medically treated according to their will and preferences.
  • A Relevant Person may, in an AHCD, appoint a designated healthcare representative to take healthcare decision on his or her behalf when he or she no longer has the capacity to make those decisions. Additionally, an AHCD trumps any EPA that the Relevant Person may already have or subsequently enter into, even if that EPA deals with healthcare decisions.

Conclusion

This article has briefly summarised the creation of an EPA under the current 1996 regime and some of the many changes which will be introduced by the 2015 Act.  It will be interesting to see whether EPAs will retain their popularity with the introduction of the new capacity support models being introduced by the 2015 Act.

The full text of the 2015 Act can be accessed here.

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