By Debbie Rosen-Solow, Adv

Trying to plan for all future eventualities used to be very difficult in Israel. Prior to recent change in the Legal Competency and Guardianship Law, the legally incapacitated had little or no say in how their personal and financial affairs would be managed. Now, with the legal recognition of a document known as an Enduring Power of Attorney (EPA), one can decide who is going to manage his or her finances, health issues, personal and social needs, and general well-being, long before one is no longer capable of doing so. The EPA empowers individuals to maintain some form of control over their future by introducing various means for support, assistance and protection, for circumstances in which their legal capacities have been temporarily or permanently restricted. As opposed to a “regular” Power of Attorney document that can only derive its power if the Appointor has not been legally restricted because of incapacitation, the EPA becomes legally binding only at the time when the Appointor is no longer able to make decisions for themselves.

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The intention behind the change is to grant individuals more autonomy in determining their futures, to preserve their dignity and express their preferences, while a person is in the position to do so.

The EPA has many important benefits. it circumvents the need for engaging in costly and often lengthy and draining court proceedings to appoint a guardian. The existence of an EPA minimizes family arguments with respect to how the affairs of the Appointor are to be handled or the course of care of the Appointor, as well as ensures continuity in the management of the personal affairs and assets of the Appointor.

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The following example illustrates how important and far-reaching this document is: Moshe, 63, happily married with five children, has worked hard to amass a range of assets, including a number of investments, real estate, a stock portfolio and accumulated savings. The family attorney has drawn up a detailed will specifying how his wealth will be divided after Moshe’s demise.

However, what will happen if Moshe, like so many of us, will spend a substantial part of his “golden age” with episodes of “incapacitation”? Recent statistics show that this is the increasing reality as the general population is aging and life expectancy is growing.

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Who, during this long period, will manage the family wealth to ensure that well-earned assets will still be there to pay for Moshe’s long-term care and be sufficient to devolve upon future generations? The appointment of a “traditional” guardian over Moshe – e.g. the wife or child – often spells financial disaster. Most, if not all, of the immediate family may lack the financial knowledge to be entrusted to manage the family assets. There may be conflicts within the family among Moshe’s children or perhaps Moshe simply does not want his children to know the extent of the family assets before his demise.

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The EPA is the solution to consider. An EPA enables Moshe, for example, to take the following action: (1) appoint his accountant and cousin to be jointly responsible for managing the assets and to provide detailed accompanying instructions on how to so do; (2) appoint his wife to be responsible for his medical affairs and look after his general welfare; (3) appoint his other children to be the nominated to receive all information from the Appointees above, their role being to ensure that Moshe’s instructions are accurately and faithfully being carried out. Moshe will need to ascertain that the Appointee and the nominated third parties agree to act as such.

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The EPA is drawn up and signed before a lawyer who has been trained and certified by the General Custodian’s office to prepare, advise and supervise the execution of an EPA.

In drawing up this document, the lawyer will discuss with the Appointor all the issues that will affect the text of the EPA. After the EPA has been signed by the Appointor and the Appointee(s), the EPA will be deposited with the General Custodian’s Office.

The EPA will become legally binding when the conditions predetermined by the Appointor are realized (for example, upon being declared mentally incompetent by two independent doctors) and with simple notice to the General Custodian’s office. The EPA can be easily updated, changed or cancelled.

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Disclaimer: The information presented above is general information and should not be regarded as legal advice. For any specific advice, one should consult with an Attorney, as there may be particular considerations that are not mentioned here.