When a high-net-worth individual becomes incapacitated, her indisposition can interrupt the smooth management of her resources and can even cause discord between members of her family. Good estate planning – at which Bahamian lawyers and financial coaches are adept – can anticipate these problems, usually through the creation of a will, an enduring power of attorney and/or a health care and personal care declaration.
These documents – which can be used in combination with each other – enforce the wishes and directions of the person in question during any period of incapacity, whether physical or mental. The individual, known in some cases as the donor, might be unable to communicate with people because she has had a stroke or an accident or because medical treatment has incapacitated her. She may be in 'lockdown' at a time when her business requires hands-on management. One of her offspring might have been trying to convince her to fund a business venture before her debilitating accident occurred, but other relatives might be trying to prevent this from happening now that the accident has happened. Her relatives, alternatively, might be vying to control her resources in the absence of any clear legal arrangements to cope with her incapacity. It is also likely that she will eventually grow old and cease to be able to decide where she ought to live, who should look after her and who should take charge of her business. The purpose of the documents is to forestall these problems by enforcing written decisions that the donor made before her incapacity.
The pandemic has brought much uncertainty into wealthy people's lives. They are not able to predict its future course but they can, at least, plan for the future of their wealth and (in the event of incapacity) of their everyday lives. They are more anxious to do so now than they were before the outbreak. Many have made it a priority to organise their affairs, taking steps to have their wishes documented and ready to be effected if necessary. Many people consider wills to be the only documents that they need to help them organise their estates.
Although the creation of a will is a prudent step, it is effective only between the date of death and the moment when the estate is wound up. To make sure that somebody is in charge of things when the high-net-worth individual is still alive but cannot express her wishes very well, she ought to tell her lawyers to prepare other documents while she is still capable. They should pay special attention to the creation of powers of attorney, enduring powers of attorney and health care and personal welfare declarations. These are all parts of proper estate planning.
A Power Of Attorney
The law of agency comes into play when someone engages someone else to act on her behalf. The ancient power of attorney is founded in this sector of the law. It gives a person appointed by its terms the authority to deal with the financial and business affairs of another. The donor in question may – or may not – give this power to a relative. She might grant it to that person generally or she might limit it to a specific transaction or time frame. This traditional power of attorney, in its original format and usage, is terminated by any period during which the donor is mentally incapacitated – perhaps if she suffers from a mental disorder, dementia or Alzheimer’s disease. There is, however, a more recent version of the power in British and Bahamian law.
An Enduring Power Of Attorney
An enduring power of attorney, created by the Powers of Attorney Act, Chapter 81, Statute Law of The Bahamas, makes it possible for a power of attorney to remain in existence and valid after a person has become mentally incapacitated. The use of powers of attorney and enduring powers of attorney permits the financial and business affairs of the donor to continue uninterrupted during periods of absence, confinement, quarantine or incapability and enables the donee to act on her behalf.
A health care or personal welfare declaration enables the donor to convey her wishes and desires regarding medical treatment, the extent of any medical intervention and her personal care. In relation to periods of confinement, quarantine or inability, whether as a result of health concerns, restricted movement or otherwise, these additional documents can ensure that the plans and aspirations of the donor are discerned and fulfilled.
Section 4 Powers of Attorney Act, which introduced enduring powers of attorney into the law of The Bahamas, provides:
“(1) The authority of a donee given by an instrument creating a power of attorney that –
The Powers of Attorney Rules, established in accordance with the Act, go into more detail. The instrument must be drawn up in a certain way. Both the person who appoints someone to deal with her financial and business affairs and the person(s) she is appointing must sign it. It must then be lodged at the Supreme Court Registry. From then on, subject to any restrictions in the document, the appointed person(s) may use it and rely on it.
If, however, someone has to make decisions about health care and personal care, a power of attorney or an enduring power of attorney cannot apply. The scope of the authority derived from an enduring power of attorney is limited to property, business and financial matters. If it is desirable to convey wishes or instructions for medical or health-care decisions or other personal matters, these ought to be set out in a statement that declares the person’s directions.
A Health Care And Personal Welfare Declaration
Many people consider it unthinkable and/or inhumane to be placed on machines or given other methods of treatment to sustain bodily functions when there is no detectable brain function, while other people want every medical resource to be available to sustain life for as long as possible. A health care and personal welfare statement or declaration can help members of a family determine their loved one's position with regard to such treatment.
In some jurisdictions, such documents are termed ‘living wills’ or ‘advanced directives’ and are supported by legislation enacted for that purpose. There is, as yet, no Act in The Bahamas that mentions or permits the creation of such instruments specifically, but a person can declare her wishes in accordance with the Oaths Act, Chapter 60, Statute law of The Bahamas with the aim of preventing uncertainty and conflict from plaguing her family after she becomes vulnerable.
In creating a health care declaration, one may derive guidance from the decisions of the courts of the United Kingdom. When considering the issuance of such instruments regarding medical treatment, Lord Donaldson of the English Court of Appeal held, in Re T (Adult: Refusal of Treatment)  Fam 95, that:
“An adult patient who, like Miss T, suffers from no mental incapacity, has an absolute right to choose whether to consent to medical treatment, to refuse it or to choose one rather than another of the treatments being offered...This right of choice is not limited to decisions which others might regard as sensible. It exists notwithstanding that the reasons for making the choice are rational, irrational, unknown or even non-existent.”
In another English case, Re C (adult: refusal of medical treatment)  1 All ER 819, it was held that the court may exercise its inherent jurisdiction and rule, through an injunction or a declaration, that an individual is capable of refusing or consenting to medical treatment. This can include future medical treatment.
Finally, Mr Justice Munby stated in HE v A Hospital NHS Trust and another  EWHC 1017 (Fam):
“I can summarise the law as follows:
This makes it clear that it is permissible for someone to make directions for medical and health care as well as for personal care. For certainty and ease of reference, the authorisation ought to be in writing. There is no reported Bahamian case law on the issue as yet, but the expression of a person’s wishes, instructions and directions for medical treatment at some time in the future when she cannot communicate instructions verbally can help members of her family and medical professionals draw up a treatment plan. If the declaration addresses personal care, her wishes regarding such matters as living arrangements (whether to receive care at home or go to a residential institution) will help her family avoid conflict about "where grandma should live."
Good estate planning can offset problems that might arise when the donor is away from home for a long time. By creating a will, an enduring power of attorney and/or a health care and personal care declaration, she can ensure that her wishes and directions are clearly discerned and effected during any periods of incapacity, whether physical or mental. The existence of such essential estate-planning documents can also ward off conflict and discord in her family. They are a source of comfort and certainty in the midst of uncertain and unsettling times.
Sharmon Ingraham can be reached on T: +1 242 502 5200 or at firstname.lastname@example.org
Sharmon Y. Ingraham is a Partner and Deputy Chair of the Private Client and Wealth Management practice group at Higgs & Johnson. Her practice includes providing advice on matters concerning trust administration and creation, pension trust creation and administration, estate administration, private client wealth management, wills and probate matters, company law and international commercial contracts. She also has experience in trust, commercial and maritime litigation, ship financing and registration matters, and banking and insurance regulatory matters. Sharmon holds a dual honours degree in Law and International Politics from the University of Keele and qualified as a Barrister (non-practising) in England and Wales. She is a member of Middle Temple, the Bahamas Bar Association, STEP (Bahamas chapter) and a member of the editorial committee for STEP.