A conversation with a friend this morning served as a stark wake up call for me on the importance of having an enduring power of attorney or EPA.
One of the questions I always ask new clients is whether they have a will. If you haven’t a will or if your will is out of date you should consider making a fresh one to ensure that your assets are distributed as you would intend, and in a way which will avoid unintended tax consequences. An internet search tells me that only c30 to 40% of Irish people have a will. This is a very low figure for such an important document.
The next most important document after a will is an enduring power of attorney. This is a legal document which allows an individual to appoint another person to make decisions on their behalf, if they lose the capacity to do so themselves. If you don’t have an enduring power of attorney you may put your family in a difficult situation where they cannot access your funds to pay for things you may need or make decisions on your behalf after you have lost the capacity to do this yourself. If you are the child of someone who doesn’t have an EPA you may find yourself in a very bad situation if someone you care about loses their capacity to care for themselves or manage their affairs.
What percentage of Irish people have signed an enduring power of attorney – a quick internet search tells me around 6%. This is 6% of adults so it would be interesting to know what percentage of people who are retired, for example, have an enduring power of attorney. I cannot find a figure for this but I would suggest that it too is low, and very likely well under the 30 to 40% of adults who have a will.
What many people don’t realise is that if they are likely to be responsible for the care of a parent in their old age there is potential for their own finances to be put at serious risk due to that parent not having signed an enduring power of attorney. This is especially critical if you are an only child and are likely to have to carry the financial burden of elder care alone.
During our call this morning my friend encouraged me to use his story to help others not to end up in the situation he finds himself in. His father had been suffering from ill health for some time and he recently passed away. His mother suffers from dementia and she was recently moved into a nursing home. As many people are aware nursing home costs are very high. While she can avail of the Fair Deal scheme to fund most of the cost this only covers the basics, it doesn’t cover extras like social activities, therapies, medical aids not deemed essential or other personal extras such as newspapers. The cost of these can also be substantial and my friend is having to meet these costs at a time when he is grieving the loss of one parent and the severe deterioration in the health of the other, and at a time when he is trying to get on the property ladder. It is now possible that he may have to defer this until his parent passes away. This is a very distressing situation for him for a number of obvious reasons.
Addressing the need for parents to sign an enduring power of attorney can be difficult as it can cause disagreement within families and even mistrust about the motives of the person who is seeking that it be done. The power of attorney must be signed while the person is still mentally capable, it can require the involvement of doctors and solicitors and it can be complex but it is nothing compared to the complexity you may face if it isn’t done. My friend is now preparing to apply to the High Court to get this resolved. More stress in what is already a stressful situation.
As my friend told me this morning he is the case study for why everyone who could find themselves in this position should address it without delay. As he said to me, you could be the most financially astute person and have done everything correctly, but an issue like this could derail your efforts substantially.
If you spend some time with your parents this weekend or if you’re a parent and you spend some time with your adult children this weekend, consider doing everyone a big favour and talk about this issue so that nobody ends up in a situation that could have been avoided with some pre-planning. You can find more information on this on the website of the Decision Support Service by clicking on this link.
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© Highfield Financial Planning 30 May 2025
