If you are acting on a power of attorney given to you by someone who subsequently becomes mentally incapable of handling their own affairs, the power of attorney becomes invalid when the person becomes incapacitated.
A power of attorney becomes invalid when the person giving the power of attorney becomes mentally incapacitated.
This rule applies to a general power of attorney where someone asks you to handle their affairs generally, for instance whilst they are overseas. It also applies to a special power of attorney for a specific transaction where, for example, a conveyancer is authorised to sign property transfer documents on behalf of a client.
When the mental capacity of the person giving the power of attorney fails, the power of attorney fails at the same time. A curator then has to be appointed to handle the affairs of the patient. This can be completely unsuitable. In order to appoint a curator you need a high court application, and the appointment of a curator to assist the patient with the application itself, and a curator to handle the patient’s affairs if the order is granted. This is a long and expensive process. The costs make serious inroads into the assets of the patient and are often more than the cost of the deal itself.
In 2004 the South African Law Reform Commission recommended the introduction of enduring powers of attorney in South Africa. Enduring powers of attorney survive the mental incapacity of a person granting the power if that is stated in the document. The power of attorney will remain valid even after the person who gave it to you becomes mentally ill. This proposal needs to be implemented.
