Retirement Benefits of an advance care directive (ACD)

Loss of decision-making capacity can occur gradually or suddenly. An ACD specifies who has decision-making authority.

28 Jul 2021
In the event of loss of decision-making capacity, an advance care directive determines who manages a person’s assets or where they live.

Whether due to accident, illness or advancing age, a sudden or gradual loss of decision-making capacity can affect anyone. When it occurs, the consequences for their partner and wider family are often far-reaching.

This applies above all to wealthy individuals, as they often have assets such as real estate or company shares which are particularly affected by a loss of decision-making ability.

What happens if you don’t set up an ACD?

A person who has lost their decision-making capacity needs someone who understands their interests and who can organize their everyday affairs. The law allows the spouse or registered partner to perform this role. However, there are certain things they cannot do, such as buy or sell a property. This requires the involvement of the Child and Adult Protection Authority (KESB). If you live alone, a legal advisor will be appointed to make decisions on your behalf.

You can also appoint a trusted person (or persons) in advance. Bear in mind that more than one person can be named. You should decide early on who you would like to care for you and make decisions on your behalf when you can no longer do so.

What an ACD does

An ACD covers the following three areas:

  • Financial affairs: In the ACD you can give someone authority to manage your assets and to make payments, for example.
  • Personal care: You can name persons who will ensure an orderly everyday life, such as making decisions on where you live, e.g., a hospital or retirement home.
  • Representation in legal affairs: A person named in the ACD can enter into agreements on your behalf, represent you in dealings with public offices or make decisions regarding your tax and insurance affairs.

Given that an ACD often does not specify any medical arrangements, it may be advisable to establish a patient decree.

Different representatives can be appointed – including outside the family

The representative of the incapacitated person does not have to be a family member. It makes sense to name alternative representatives, in case the designated person cannot or will not perform the role.

If more than one representative is named, do not forget to clearly stipulate the relationship between them. For example, if you want your children to make decisions about your well-being, you should specify which child has the final word to prevent possible impasses if opinions differ.

How to draw up an ACD correctly

An ACD must be handwritten by you, signed and dated. Remember that any handwritten amendments must also be marked clearly, and also signed and dated. If you cannot draw up an ACD by yourself, it can be drawn up with a notary. In the case of a publicly notarized ACD, the notary checks it for accuracy and confirms your decision-making capacity. Remember that any change to a publicly notarized document must also be notarized.

You are advised to inform the person(s) named as representative(s) in the ACD of its content and your expectations.

You are also advised to store the ACD somewhere where it can easily be found by an outside party. Remember that the KESB will only recognize the original of your ACD. Copies are considered to be for information only and are not legally valid.

An ACD is valid until revoked and can be amended at any time. It is also void if the person concerned regains their decision-making capacity.

What is the process concerning an ACD in the event of loss of decision-making capacity?

If loss of decision-making capacity occurs, the KESB checks whether a valid ACD exists and whether the person(s) selected is/are suitable for the tasks concerned and whether they are willing to take on the mandate. The person(s) commissioned will then receive a certificate for legitimation known as a validation decision.

Security checklist

Who should take over in the event of a loss of decision-making capacity?

  • The person(s) chosen to act on your behalf need(s) to be completely trustworthy. That is why it is important to discuss these issues and the different considerations with close family.
  • An ACD allows you to determine who can make decisions on personal matters on your behalf, should you lose this capacity. These can be decisions relating to how your assets are managed or the signing or canceling of contracts.
  • Remember only to name persons in the ACD who are willing and able to perform such tasks.
  • Ideally you should name alternative representatives in case the designated person cannot or will not take on the task.
  • You can find further information in our guide on loss of decision-making capacity

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