It is a general principle in our law that no person may act on behalf of another, unless he has the necessary authority to do so. Such authorisation is commonly referred to as a Power of Attorney.
A Power of Attorney is a legal document, whereby an individual (the principal) who has full contractual capacity to manage his/her affairs appoints someone (the agent) to act on his/her behalf.
The Power of Attorney will set out the nature and scope of the agent’s powers to act on behalf of the principal, including but not limited to, the signing of legal documents, entering into contracts, opening and closing bank accounts, selling or purchasing property and instituting legal action.
A Power of Attorney is a useful tool that can be used in many situations.
For example when a person will be leaving South Africa temporarily or indefinitely he/she may decide to grant a Power of Attorney to a trusted family member or when an elderly parent who, due to their age, finds it difficult to attend to their affairs decides to grant a Power of Attorney to their adult child.
Of course a principal can cancel his/her own Power of Attorney at any time, but what is not so well known and what many don’t realise is that a Power of Attorney terminates automatically if and when –
The principal dies;
The principal’s estate is sequestrated;
The principal becomes mentally incapacitated i.e. a stroke, coma following an accident, mental illness, dementia, Alzheimer’s, general age-related diminishing capacity etc.
It’s this last scenario that catches most people unawares, because it seems so illogical for the power of attorney to lapse just when it’s needed most. But that, unfortunately, is the law. An agent can only do what the principal can do, so if a principal loses legal capacity, the power of attorney immediately fails.
When a Power of Attorney lapses or is revoked, it becomes void and the agent no longer has the power to act on the principal’s behalf. It’s important to note that should an agent act on the authority of a lapsed power of attorney, they may become personally liable for any damages suffered, as they have no legal authority to act.
If someone however lacks the mental capacity to act, due to dementia, a stroke or any other medical condition, the High Court may be approached to appoint a curator bonis to act on behalf of the person, alternatively, in specific instances, the Master of the High Court may be approached to appoint an administrator in terms of the Mental Incapacity Act.
Before acting as an agent in terms of a special or general power of attorney one MUST ascertain whether his/ her principal has lost legal capacity.
Beware the Agent!!
Kind Regards
Allen West
TONKIN CLACEY PRETORIA
012 346 1278
