ENDURING POWERS OF ATTORNEY

An enduring power of attorney (hereinafter referred to as "EPA") is a special form of power of attorney.  Unlike the usual power of attorney, an EPA is not revoked by reasons of any subsequent mental incapacity of the donor of the EPA.  In other words, an EPA will survive even if its donor subsequently suffers from any illness, accident or tragedy rendering him lacking of mental capacity to deal with his property and financial affairs.

As part of the estate planning, one should consider making a EPA.  Bearing in mind, a Will will only come into effect on the death of its maker.

An EPA will only be valid and enforceable, if it is made in the form prescribed by the Enduring Powers of Attorney Ordinance (Cap.501) and executed by the donor and the attorney of the EPA in the manner prescribed in the said Ordinance.

The donor of an EPA can expressly provide a date or an event in the EPA for its commencement.  Meaning the donor can include a restriction in the EPA preventing the attorney's authority to come into effect until a specified date or the happening of certain event in future.  Without such restriction, the EPA will come into effect on the date of signing.

As far as the scope of the EPA is concerned, the donor cannot give his attorney a general authority over all his property and financial affairs.  If so, the EPA is not valid.  On the contrary, the donor should state what specific power he would like his attorney to have in relation with his property and financial affairs or the particular property or financial affairs for which he has given to his attorney to act.

As an additional safeguard to the donor of the EPA, if and when the attorney appointed under an EPA has reason to believe that the donor is or is becoming mentally incapable, he must as soon as possible apply to the Registrar of the High Court to register the instrument creating the EPA.  The Registrar of the High Court will register the EPA if he is satisfied that the instrument purports to create an EPA is in compliance with the rules and requirements of the Ordinance.  The donor can direct the attorney to notify person or persons nominated in the EPA before applying for the registration of the EPA.  Once the registration process is completed, the attorney can make decisions on behalf of donor after he becomes mentally incapable. 

The EPA will come to an end on the death of the donor or the attorney.  If the donor recovers from mental incapacity or before he becomes mental incapable, he can revoke the EPA.  The Court can also revoke an EPA and/or to remove the attorney in accordance with the provisions set out in the Ordinance.  The EPA will come to an end on the appointment of a committee pursuant to Part II of the Mental Health Ordinance, Cap.136.  The EPA will also lapse on the bankruptcy of the attorney.

Albert Lam

Partner

HAMPTON, WINTER AND GLYNN

October 2015