Legal Question: Does a General Power of Attorney remain valid after a person has become incapacitated?
Kyle Stanley from Snyman de Jager provides some insight.
A Power of Attorney is defined as an instrument which is generally employed in South Africa, in which one person (the principal) confers specific or general powers to another (the agent) to exercise such powers for the benefit of the principal.
The primary purpose of the Power of Attorney in circumstances such as these is to enable a child or close relative the power to access their parents or elderly relatives funds to settle on-going expenses, sell and purchase assets, re-home their parent or relative and to administer their affairs in general where the last mentioned has become incapacitated.
The Power of Attorney has limited application in that it may be a useful instrument for anyone who is frail or indisposed or out of the country, or who do not wish to deal with the red tape of commercial life. It has, however, very little value in instances where the grantor has cognitive impediments or is later diagnosed with a cognitive impediment.
Therefore, the moment the patient exhibits actions which are in line with the loss of mental capacity, the application of the Power of Attorney can become problematic.
It would, therefore, be unlawful for the agent to act based on the Power of Attorney, more so if they are aware that the principal has lost capacity. As such, the person who continues to act in terms of the Power of Attorney may expose themselves to legal disputes and claims.
It is common cause that a principal can cancel his/her power of attorney at any time. However, what is not so commonly known is that a power of attorney will automatically terminate if and when the principal dies, becomes insolvent and his/her estate is sequestrated, becomes mentally incapacitated in a sense that they are unable to make decisions (as a result of a stroke, coma, mental illness, Alzheimer’s, general age diminishing capacity etc.).
It is the last mentioned ‘diminishing capacity’ which catches most caregivers unawares as the entire purpose of the General Power of Attorney was to assist the parent who could no longer act for him/herself.
It is recommended that the caregiver, whoever that will be, is to consider either the appointment of a curator or the creation of a Special Trust whereby they wish to manage the affairs of an incapacitated relative or parent.