VI. What will happen if a person fails to execute an Enduring Power of Attorney before he/she becomes mentally incapacitated?
Statistical figures indicate that the EPA is far from being a tool commonly used by Hong Kong citizens. Enough has been said here about the advantages of an EPA. Let’s take a look at a hypothetical case where the protagonist fails to execute an EPA before he becomes mentally incapacitated.
Hypothetical case: Mr. X
Mr. X, who was 60 years old and financial relatively well-off, began to show signs of memory loss, decreased ability to think, language impairment, inability to recognize relatives, and other indicative signs of dementia. Mrs. X heard about the concept of an EPA and thought that it was a good idea to get Mr. X sign an EPA. She promptly got a solicitor to advise her on the feasibility of making an EPA for Mr. X. The solicitor told her that since Mr. X already showed signs of dementia, it was perhaps too late to try to do an EPA because Mr. X had to do it while he was still mentally sound. The solicitor then recommended Mr. and Mrs. X to consult a medical doctor as soon as possible to ascertain Mr. X’s mental status. Mrs. X brought Mr. X to consult a few medical practitioners; and all of them diagnosed Mr. X as suffering from dementia and was no longer mentally capable. Naturally, none of these medical practitioners are prepared to certify on an EPA that Mr. X is mentally capable. Now apart from taking care of Mr. X’s physical well-being, the X family has to face the following financial problems:
- While the family appears relatively well-off, most of the family assets, including cash in banks and shares in publicly listed companies are held in Mr. X’s sole name.
- Therefore, Mrs. X is not able to touch or liquidate those assets to cater for the family’s fiscal expenses and Mr. X’s medical expenses.
- Mr. and Mrs. X have a joint account at a bank, with a balance of several hundred thousand dollars. Mrs. X will be able to withdraw money from this account. But it is expected that the money in this account will be depleted within a few years (or maybe within an even shorter period).
- Mrs. X will now have to rely on her own savings to support the family.
- Mrs. X will also have to sell some of her jewellery to get some cash. Luckily most of her jewellery is kept in a safe deposit box in her own name.
- Mrs. X understands that Mr. X has kept some rare coins which would worth some money. Those coins were kept in a safe deposit box in Mr. X’s sole name. So again Mrs. X cannot access them.
- The most disturbing matter is their son. Mr. and Mrs. X have a son, who unfortunately is a spendthrift and has never had a proper job even though he is already 40 years old. The relationship between the parents and the son is of course bitter. However, since this is their only son, Mr. and Mrs. X still love him and have tolerated him and financially supported him for years. Now Mrs. X is very worried that their son will take advantage of Mr. X’s mental condition by, for instance, taking Mr. X to the bank to withdraw a large sum of money and get the money for himself.
Evidently, none of the above disastrous events would happen if Mr. X had made an EPA while he was still mentally capable.