In many countries, there is what is called a durable power of attorney. Making a durable power of attorney for finances ensures that someone you trust will have the legal authority to take care of financial matters if you become incapacitated and unable to handle things yourself. (The term “durable” simply means that the document remains effective if you become incapacitated. A nondurable power of attorney would automatically end if you are no longer of sound mind). The tasks may range from paying bills to handling insurance and filing taxes.
South Africa has not yet accepted that principle. Accordingly, if you appoint an agent on your behalf to manage some or all your affairs in terms of a general or special power of attorney, the rights that the agent enjoys under such power of attorney will lapse if you become incapacitated or die.
Incapacity may be temporary (for example if you have a stroke that you recover from or are badly injured in a motor collision) or permanent (for example if you never recover from your stroke or suffer from dementia or other mental impairment).
The consequence of this is that if you are deemed to be unable to manage your financial affairs your family needs to approach the High Court, at huge expense, to appoint a curator to act on your behalf. Curatorship proceedings are not only complicated and expensive, but they put private matters on public record – rarely a desirable outcome.
If the concept of a durable power of attorney does not apply in South Africa and if South African powers of attorney lapse on your death or incapacity, what is your option?
Approach your lawyer to implement a modern living-trust-centred estate plan. He or she will advise you how to take best advantage of the planning talents of your accountant, financial planner and stock broker, to manage your affairs, not only during your period of disability. This would enable you to have a say in the control of your property while you are alive; provide for you, your spouse, and your children, without any curator proceedings, if you become sick, injured or disabled; provide for your loved ones in exactly the way you want after you die and make absolutely sure you don’t take your family public and make a lot of strangers richer at your expense or the expense of your loved ones.