EXPLAINER | What to do when someone can no longer manage their finances
Families who need to manage the affairs of someone who is mentally ill or has a severe or profound intellectual disability can apply to the Master of the High Court to appoint an administrator.
A power of attorney document does not have to be drawn up by legal adviser, financial adviser or financial institution, but these professionals will be best placed to ensure the document is correctly worded.Clearly identify the person to whom the power is granted . Once they have lost the capacity, any power of attorney they enter into will not be valid and could be challenged by anyone who believes the agent is acting without authority.
The Law Reform Commission has recommended a similar power of attorney be introduced in South Africa, but the recommendation has not been implemented. This could be by way of affidavit from someone who witnessed the application being given to the incapacitated person or their signature. In this case, the administrator will have to provide a bond of security by an approved financial institution for the full value of the property they are administering.
An administrator is entitled in terms of the Administration of Estates Act to charge six percent of the annual income of the estate and two percent of the value of the capital assets of the estate when the administration is terminated.It is also possible to get authority to manage the affairs of someone who is unable to do so themselves by applying to the High Court to have a curator bonis appointed.
They are also required to act in the best interests of the incapacitated person and to act with integrity.
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