Liam Croke: When loved ones can’t make financial decisions for themselves

It took me about an hour to write this article and in that time, 20 people will have developed dementia. Today, and every other day of the year, 27 people will be admitted to hospital because they have suffered a stroke.

It took me about an hour to write this article and in that time, 20 people will have developed dementia. Today, and every other day of the year, 27 people will be admitted to hospital because they have suffered a stroke.

It is estimated that 48,000 people in Ireland suffer from Alzheimer’s. And about 9,000 people have been diagnosed with Parkinson’s.

The rate of new cases in each of these terrible diseases is set to increase alarmingly over the next number of decades.

Many of us have people close to us who have been affected by these awful diseases. The reason I am giving you these statistics – in fact, the reason I became interested in this topic in the first place – is because earlier this month I was talking with a friend who was telling me about how his mother had been diagnosed with Alzheimer’s. He was unsure what he should be doing regarding her bank accounts and her finances in general.

This got me thinking that very few of us ever think about what the consequences would be for a loved one if their health deteriorated to such an extent that they were unable to make rational decisions for themselves. Yes, some people make provisions by having life assurance policies in place but we never give much thought to what would happen if someone living was unable to make decisions for themselves.

I think the reasons are down to the old chestnut that ‘it will never happen to me or anyone belonging to me’. People think this really only applies to the very, very old. They just don’t know what can be done – but I am here to tell you that something can be done.

Before I do, let me first tell you what would happen to your mother, father, brother, sister, partner or friend if they suffered an illness or accident which resulted in them not having the mental capacity to make decisions for themselves: they become a ward of court.

This is a court-based process where someone, usually a relative, must apply to the wards of court office to become a deputy, in order to take care of that person’s welfare and financial affairs. The difficulty with this process is that it can take time and can be costly. Many people who have had to go through it are not prepared for the time involved and the legal and financial challenges they face and wish there was an alternative. The good news is that there is and it’s called an enduring power of attorney (EPA).

Never heard of an EPA? I’m not surprised if you haven’t because the majority of people I asked about it recently hadn’t a clue. An EPA is simply a legal document which lets you appoint a person (usually a family member or someone close to you who is familiar with your circumstances) to make decisions for you if you become mentally incapable of making them yourself.

You don’t have to nominate just one person – it could be two people or you could nominate one who will handle all of your financial and property affairs and a second who will make decisions about your health and welfare.

If my friend whose mother has Alzheimer’s, had an EPA in place, it would allow him deal with all of her bills, bank accounts, debt, property etc right away. The lesson for me is not to wait until someone is diagnosed with an illness or suffers from an unexpected accident. It can be very difficult for us to identify the early signs of dementia in particular. It can progress at a very slow pace, lasting many years, or it can develop very quickly. You can also never tell when an accident or an illness could strike so we have got to be proactive and not suffer from complacency.

Now is the time to have that conversation with a parent or loved one, while they have their health and or the mental capacity to put an EPA in place. The same, by the way, goes for you. If you want to set up an EPA, there are a number of steps required and the services of both a doctor and a solicitor are needed. Your first step is making contact with a solicitor. In law, the document that creates an EPA is in a prescribed format and must include statements by your solicitor confirming they are satisfied that you understood the effect of creating this power and you are acting of your own free will and not under anyone else’s influence.

Secondly, for an EPA to be valid you also need your GP to provide a statement, confirming that at the time the EPA was drawn up, you were of sound mind and you understood the effect of creating this power of attorney.

Thirdly, you must notify at least two other people when you create an EPA. One of these people must be your spouse if they are living with you. If you are unmarried, separated or widowed, one of the two people you must notify is your child (if you have children) or else a relation such as a parent, sister or brother, nephew or niece.

An EPA will only ever come into effect when it has been registered by your solicitor in the High Court - until this happens, they hold your EPA documents in safekeeping. They will only do this when it becomes obvious you have become mentally incapable of making decisions for yourself.