Enduring Powers of Attorney - Law Reform Commission
Enduring Powers of Attorney
Description
On 15 February, 2007, the Honourable Attorney General requesting that the Law Reform Commission (“the Commission”) consider whether legislation should be enacted governing enduring powers of attorney to assist in estate planning.
An enduring power of attorney is a variation on the ordinary power of attorney. It permits a donor to grant a power of attorney that continues in force despite the donor’s later mental incapacity, or that comes into force on the donor becoming mentally incapacitated.
Terms of Reference
In carrying out its research, the Commission investigated how enduring powers were addressed in other jurisdictions, including the United States, the United Kingdom, the Canadian provinces of Alberta, Saskatchewan, Manitoba and British Columbia, Australia, Hong Kong, and New Zealand, and the success or failures such jurisdictions had have in this area.
Outcomes
The Commission submitted a preliminary discussion paper titled “Is There a Need for Enduring Powers of Attorney in the Cayman Islands?” to key stakeholders for consultation on 12 January, 2009. The paper contained a discussion of the merits and disadvantages of enduring powers of attorney and posed a number of consultation questions.
The consultation period commenced on 12 January, 2009 and concluded on 20 February, 2009.
On 30 April, 2009, the Commission published its Final Report, titled “Is There a Need for Enduring Powers of Attorney in the Cayman Islands?”, which set out the issues, the questions posed to stakeholders, the answers given as well as the final recommendations of the Commission.
While acknowledging the advantages of enduring powers of attorney, the Commission noted that a number of problems have been identified in other jurisdictions, including abuses in the granting and use of the power, ineffective monitoring of attorneys, and legislative difficulty in defining mental incapacity.
In the absence of a power of attorney, the Grand Court can appoint a guardian or receiver for a person incapable of managing their own affairs. Such guardian or receiver is required to account to the Court for the receipt and disposition of property and in respect of decisions made on behalf of the person under guardianship.
The Commission concluded that the powers of the Court are comprehensive and contain sufficient safeguards against abuse. It therefore recommended against enacting legislation providing for enduring powers of attorney.
