The infamous Power of Attorney
IS THE POWER OF ATTORNEY BY VIRTUE OF WHICH YOU ARE ACTING VALID?
Ever so often we receive requests from clients to draft Powers of Attorney to act as Agents in order to assist their frail, ailing or absent parents or spouses in the administration of their day to day banking, financial or household affairs. Through the years we have learned that the everyday man on the street generally does not really know under which circumstances a Power of Attorney will be a valid mandate to act on someone else's behalf and the aim of this article is to shed some light on this topic.
GENERAL POWER OF ATTORNEY VS SPECIAL POWER OF ATTORNEY
In terms of a Special Power of Attorney, an Agent is authorised to perform a specific, identified act on behalf of the Principal and once that specified act is successfully concluded, the Power of Attorney is exhausted and of no further force or effect.
A General Power of Attorney authorises the Agent to perform a collection of specified acts in terms of one document and unless the Principal (the giver of the Power of Attorney) specified a determinable term for the validity of the Power of Attorney in the document, it normally only terminates on the death, insolvency or mental incapacity of the Principal.
POWER OF ATTORNEY FOR BANKING PURPOSES
Although a General Power of Attorney usually makes provision that the Agent may for example open, close or transact on the Grantor's bank account, experience has taught us that most of the major South African banks do not accept General Powers of Attorney drafted externally and insist that the account holder visits one of their branches in person to sign a Power of Attorney that was drafted by the bank. These "banking" Powers of Attorney will always be restricted to allow the Agent to perform limited acts on a specific account of the Grantor.
THE REQUIREMENTS FOR A VALID POWER OF ATTORNEY
- A Power of Attorney has to be reduced to writing and be signed by the Grantor in the presence of two witnesses who are above the age of 14 years and are capable of giving evidence in court. The exceptions to the two witness rule are where the Power of Attorney is signed either before a Commissioner of Oaths, Magistrate, Justice of the Peace or a Notary.
- The person who grants the Power of Attorney must have the capacity to perform and enter into legal and binding contracts. In other words, the grantor must be an adult who is able to manage his own affairs.
- The grantor can only grant such powers to his Agent as to which he is capable or authorised to perform himself. In essence, this means that the Grantor must have the mental capacity to make important decisions and must not be under sequestration or under curatorship.
This capacity to act must also be present during the whole period of the validity of the power of Attorney. As soon as the Grantor's mental capacity diminishes to the extent that he can no longer make sound decisions, the Power of Attorney terminates.
It is important to distinguish between the mental and physical capacity of the Grantor. If for example, the Grantor is paralysed, but fully conscious and aware of his surroundings, he can grant a Power of Attorney, or if he granted a Power of Attorney prior to his physical paralysis, that Power of Attorney will still be valid.
On the other hand, if mentally incapacitating illnesses like Dementia or Alzheimer's disease set in, the Grantor loses his ability to make sound decisions and can therefor not grant Power of Attorney. Please take note: A Power of Attorney which was granted prior to the onset of such a mentally incapacitating illness will terminate as soon as a positive diagnosis has been made by a medical professional.
THE NEXT STEP
In the event that it is suspected that a person is losing the mental capacity to make sound decisions and take care of his own well being, an attorney should be approached to assist with an application to have a Curator appointed by the High Court. The process also involves medical and mental assessments by specialised health professionals who will then compile a report for the court's consideration in reaching its decision. If all the required criteria are met, the court may appoint a curator bonis. This is normally a legal representative that will be tasked to manage the finances, property and the estate of the patient. Under more severe circumstances the court may also appoint a curator ad personam who will take on the responsibility of looking after the patient's physical welfare such as his accommodation, health and day to day care.
WE CAN HELP
Whether you need assistance with a General or Special Power of Attorney to act on someone's behalf that is physically absent or frail; or whether you think it might be necessary to have a curator appointed on behalf of someone who can not manage his own affairs any more, you are invited to contact Louw & Coetzee Attorneys. We have a qualified team of attorneys, conveyancers and notaries, dedicated to professional yet personal service, that are looking forward to be of assistance to you.
Unfortunately we cannot prevent illnesses and physical frailty to enter into our lives, however, we can act in the best interest of those persons who are unable to fend for themselves. If you are even slightly uncertain whether a person is mentally or physically incapable of handling his or her own affairs, please contact us to discuss the appropriate steps to follow.
Article by: Tania van Toorn, senior attorney, notary & conveyancer from Louw & Coetzee Attorneys, contact her should you have any queries relating to the POA at firstname.lastname@example.org / 021 976 3180.
Editor: Alet Smit Head of Marketing Louw & Coetzee Group
Author: Tania van Toorn - Louw & Coetzee Attorneys