Mental health and estate planning
The demographic shift towards an ageing population in Bermuda raises important matters that should be considered, including any legal problems encountered in the wake of an ageing trend, and what steps can be taken in anticipation of getting older.
As the ageing population grows, there comes the inherent risk that more individuals could lose their mental capacity. This includes, but is not limited to, instances of dementia, Alzheimer’s and mental health conditions.
Bermuda’s Mental Health Act 1968 acknowledges these persons as “patients”, and the Act aims to protect the interests of the mentally ill population and protect their rights.
Given current demographic trends, all families should take proactive estate planning steps with a view to preserving their legacy and assets.
The best course of action is execution of an enduring power of attorney, which confers power to another to act on one’s behalf in the event of mental incapacitation or any other reason. An EPOA allows a person to represent and act on behalf of the patient in their private affairs, business and other legal matters.
An EPOA can be tailored to suit the individual — a power can be general to allow the conduct of any sort of business on behalf of the patient, or it can be limited.
Executing an EPOA while a family’s senior relative has the requisite capacity will allow for a seamless transition of the management of their affairs should they develop a mental disorder that means they can no longer manage them. In such instances, the EPOA will take effect upon the person’s mental incapacitation.
One benefit of having executed an EPOA is the avoidance of costly court proceedings such as receivership applications. The flip side is that failure to adequately plan in this regard can result in just such proceedings.
Without an EPOA, family members of the patient will not be able to act on their behalf should the patient encounter difficulties regarding personal and/or business affairs that require remediation and resolution.
In such cases, family members would have to apply to the Supreme Court, pursuant to the Act, to be appointed the receiver of the patient.
When considering the execution of an EPOA, the first step is to identify a responsible person whom you trust to properly manage your affairs on your behalf.
The next step is to register the EPOA at the Registry General. Although this is not a legal requirement at the time of signing, it is recommended when the EPOA comes into effect as the registration serves as public notice that the EPOA exists.
We would all love to see our elders remain in the best of health with sharp minds. However, should mental decline set in, prudent estate planning can result in a more favourable outcome than not being prepared at all.
Preparing for the worst while hoping for the best is a wise course of action.
First Published in The Royal Gazette, Legally Speaking column, September 2024.
