Enduring Power of Attorney for Financial Matters | Attorney Rozil Amir

What is an Enduring Power of Attorney for Financial Matters?

An enduring power of attorney for financial matters is a vital legal document that allows a person (the principal) to transfer management powers and decision-making authority over financial and economic matters to another person (the attorney-in-fact) in a manner that continues even after the principal loses mental capacity or the ability to act independently. Unlike a regular power of attorney, which terminates when the principal becomes incapacitated, an enduring power of attorney (Enduring Power of Attorney) remains in effect even when the principal can no longer make decisions independently — due to illness, advanced age, accident, or any other reason affecting mental capacity.

In Israel, an enduring power of attorney is created in accordance with the Enduring Power of Attorney Law (1993) and requires a proper legal procedure — notification to the authorities, approval by a family court, and accurate documentation. It is an essential protective tool for anyone who wishes to ensure that their assets, bank accounts, essential expenses, and obligations are managed responsibly and ethically even if they cannot do so themselves.

Who needs this?

• Elderly individuals: People aged 60 and above who are concerned about declining cognitive ability or chronic illnesses.
• People with serious health conditions: Cancer patients, those with complicated diabetes, high blood pressure, or any condition that could affect the ability to manage financial matters.
• Individuals with substantial assets: People who own real estate, investments, businesses, or large bank accounts requiring ongoing management.
• Families with young children: Parents who wish to ensure that their children and their accounts are properly cared for if something happens to them.
• Single people or those without close family: Those who lack natural family relatives and want to have clear control over who will handle their affairs.

Critical Difference: Regular Power of Attorney vs. Enduring Power of Attorney

A regular power of attorney terminates the moment the principal becomes incapacitated. This means that if you become ill and lose mental capacity, your attorney-in-fact can no longer act on your behalf — and then you must apply to court for the appointment of a guardian, a process that can be lengthy, expensive, and give you less control over who will manage your assets. An enduring power of attorney solves this problem: it remains in effect even when you cannot manage your affairs yourself, providing you with peace of mind and savings in time and money.

Why Is a Durable Power of Attorney for Property Matters So Important?

In life, we often forget that legal protection is like health insurance — you don't think you'll need it until suddenly you do. A durable power of attorney for property matters is a protective tool that safeguards both sides: the grantor (you) and the attorney-in-fact (the person you choose).

Key Advantages:

• Complete Control: You choose who will manage your assets — not a court, not the state. This is a person you trust completely.
• Time and Cost Savings: There is no need for lengthy court proceedings to appoint a guardian if something happens to you.
• Continuity: Your assets, liabilities, and obligations will be managed without interruption, even when you cannot act.
• Privacy: Unlike public court proceedings, a durable power of attorney is entirely a private matter.
• Protection Against Exploitation: When properly documented and approved by court, it is more difficult for a malicious person to misuse this power.
• Peace of Mind: You know that in case of a health crisis, everything will be handled as you wished.

Risks If You Don't Do It:

If you don't execute a durable power of attorney and you become ill or lose capacity, your family members will need to file an application with the family court to appoint a guardian. This process can take months, cost thousands of shekels in legal fees, and can cause family friction if there are different opinions about who should be the guardian. Additionally, a court may appoint a guardian you did not choose — perhaps someone you don't fully trust, or even a government-appointed substitute if there is no suitable family member. This is a significant risk to your assets and your peace of mind.

Comparative Table: Scenarios and Property Matter Management

Conclusion: A continuing power of attorney for property matters is a small investment in substantial peace of mind. It saves time, money, and family friction during a crisis.

Types of Property Matters That Can Be Included in a Continuing Power of Attorney

A continuing power of attorney for property matters can cover a wide range of powers, depending on your needs and the level of control you wish to retain. You do not have to transfer everything — you can choose exactly which matters the attorney-in-fact will be able to manage.

Financial and Economic Matters:

• Bank Accounts: Deposits, withdrawals, money transfers, management of various accounts.
• Investments: Purchase and sale of stocks, bonds, investment funds.
• Insurance: Management of life insurance, health insurance, property insurance policies; collection of claims.
• Pension and Savings: Access to pension accounts, study fund, statutory pension fund.
• Loan Principal and Interest: Payment of mortgages, personal loans, any financial debt.

Real Estate Matters:

• Sale and Purchase of Assets: If you want the attorney-in-fact to be able to sell or purchase an apartment, house, or land on your behalf.
• Rental Management: If you have an apartment for rent, the attorney-in-fact can collect rental payments, pay for repairs, etc.
• Land Registry Updates: Recording changes in the land registry (Tabu).

Tax Matters:

• Filing Tax Returns: Filing an annual income tax return with the tax authorities.
• Payment of Taxes: Payment of annual taxes, property taxes, capital gains tax.
• Handling Tax Audits: Cooperation with the tax authorities during an audit.

Legal and Contractual Matters:

• Representation in Legal Proceedings: If you have a claim or legal proceeding, the attorney-in-fact can represent you in signing documents.
• Signing Contracts: Employment contracts, service contracts, financial contracts.

Other Matters:

• Business Management: If you have a self-employed business or a company, the attorney-in-fact can manage day-to-day operations.
• Handling Inheritance: If you have rights in an inheritance or will, the attorney-in-fact can manage the matter.

Important: You can choose to include only some of these matters and exclude others. For example, you can grant authority over bank accounts but not over the sale of assets. Any limitation must be clearly stated in the power of attorney.

Choosing an Attorney-in-Fact: Who Should It Be?

This is a critical decision. Your attorney-in-fact should be someone you trust completely — someone who will act in your image, with honesty, and without exploitation. Typically, this will be a family member, but not always.

Characteristics of a Good Attorney-in-Fact:

• Reliability and Honesty: A person who has proven to be reliable and trustworthy.
• Management Ability: Someone who knows how to handle financial matters and has some understanding of legal issues.
• Availability: Someone who will be available when decisions need to be made or when action is required on your behalf.
• Absence of Conflict of Interest: A person who has no personal interest in your assets or decisions.
• Health and Sound Mind: Your attorney-in-fact must have full mental capacity.

Who Can Be an Attorney-in-Fact?

• Spouse: Your spouse, if you are married.
• Adult Children: Your son or daughter aged 18 and over.
• Parent: If your parent still has full mental capacity.
• Sibling: A family member you trust.
• Close Friend: Someone you trust like family.
• Attorney: In some cases, a professional such as an attorney or accountant can serve as attorney-in-fact, especially if there is no suitable family member.

Who Cannot Be an Attorney-in-Fact:

• A person lacking mental capacity (e.g., someone with dementia or severe cognitive disability).
• A person with a clear conflict of interest (e.g., someone to whom you owe a large sum of money).
• A person in bankruptcy proceedings or with significant legal debts.

Important Advice: Cooperation with Your Attorney-in-Fact

After you choose your attorney-in-fact, it is important to discuss your expectations with them. Explain what you want them to do, what level of control you want them to have, and how they should report to you (if you are still able). Write down instructions in writing if possible — this will help prevent misunderstandings in the future.