01 Jun CURATORSHIP
Few people realise that a Power of Attorney is rendered invalid when the person who signed it, is declared mentally incompetent by a medical specialist. Understandably, this person must be protected from unethical opportunists but anyone who has been acting on behalf of the individual who signed the Power of Attorney, may no longer legally continue in that capacity.
Say the mental incapacitation is temporary, it could be a PTSD episode that prevents an individual from functioning normally for a particular period, a Power of Attorney is useless. The affected person will find themselves with fewer rights than a minor and a curator will need to be appointed.
Papers to appoint a curator must be drawn up by an attorney and taken to Court by an advocate. If the judge is satisfied, he or she will appoint a curator ‘ad litem’ (an interim curator) to find a suitable permanent candidate to act as curator of this person’s affairs, usually someone with bookkeeping or accounting skills. A judge is required to approve the choice made by the curator ad litem, providing the candidate is prepared to accept the task. The curator will be remunerated for the performance of his or her duties, typically a percentage of the individual’s capital, and prescribed tariffs will apply on income received and/or distributed.
This is calculated on gross value. If, for instance, the individual has R5 million in capital and R3 million in debt, the fee would be calculated on R5 million. Add the legal and curator fees to the medical expenses and ponder the escalating costs for a moment…
Here are some of the realities of the Court Order given to the Curator/Curatrix if you become the patient:
- Consent to any medical or surgical treatment you may need.
- Your detention in or removal to any hospital or similar institution.
- To receive, take care of, control and administer all your assets.
- To carry on or discontinue, subject to any law which may be applicable, any trade, business or undertaking of yours.
- To let, exchange, partition, alienate and for any lawful purpose to mortgage or pledge any property belonging you, or in which you have an interest.
- To incur expenditure in respect of the improvement of any property you own by means of building or otherwise.
- To expend any moneys belonging to you on the maintenance, education, or advancement of any relative of yours or any other person wholly or partially dependent on you, to continue such acts of bounty or charity exercised by you as the Master, having regard to the circumstances and the value of your estate, considers reasonable.
Despite the Court’s best intentions at the time of appointment, some curators are better than others. Should any breach of trust occur, or competency levels come into question, the Court (on application) has the power to have the curator removed. However, the curator in question, has the right to oppose any assertion of misconduct or incompetency and tie you up in a protracted legal battle while you, perhaps now recovered, have no access to any of your assets.
WHAT IS THE ALTERNATIVE?
While you have all your faculties, accept that the above scenario could become a reality one day, particularly if dementia runs in your family. Pre-empt the potential disaster and think about putting your assets into a Discretionary Living Trust. The Trustees, guided by the provisions you made in the Trust Deed, will ensure that no stranger gains control of your affairs and assets. At a fraction of the cost. Prioritise the protection of your assets and quality of care you would like to receive if you are ever mentally incapacitated, be it long or short term.
A Discretionary Living Trust offers a more secure solution and places you in the hands of people you trust – personally and financially. The tailored alternative of setting up a Discretionary Living Trust will negate this potentially disempowering scenario, save you money and provide peace of mind.