loading

When the unexpected happens

14/02/2019

An event such as an accident, illness or stroke can impair our faculties, either temporarily or permanently. While it is quite common to carry out inheritance planning by drafting a will or a contract of inheritance, few consider the risk of losing their capability of judgment. However, there is a solution: the Advance Care Directive. 

What is an Advance Care Directive?

An advance care directive allows a person with capacity to act to appoint another party to represent him or her for specific purposes in the event that he or she is no longer capable of judgement. In the absence of an advance care directive, most legal acts will be governed by the Adult Protection Authority, which will appoint a curator.

When is an Advance Care Directive appropriate?

Here are some examples of when an advance care directive can prove very useful: 

A woman owns a large investment portfolio that is being managed by a bank. She falls ill and becomes incapable. The advance care directive allows the asset management agreement with the bank to be adjusted to the woman’s new situation.

A man is the joint owner of real estate with his wife, on which they have a joint mortgage. He becomes incapable of judgement following a stroke. In this situation the wife cannot renew the mortgage or sell the house because those legal acts require the consent of both spouses. Without an advance care directive, a married couple can only represent each other with respect to basic acts such as ordinary dealings regarding income or managing correspondence. With an advance care directive, a deadlocked situation can be avoided.

A manager and shareholder in a limited liability company becomes incapable following a ski accident. Without specific measures he cannot be represented by his wife in the company’s shareholders’ meeting. If he is also the sole signatory on the company’s bank accounts, they will be frozen. With an advance care directive, however, his company could continue operating without any interruption.

What does the appointee have to do?

Under the advance care directive, the appointee acts on behalf of the client in all his/her legal relationships with third parties (insurance companies, authorities etc.). The appointee deals with the client’s movable property and real-estate assets – including handling a mortgage and arranging the sale of a property – based on the client’s wishes.

What form must an advance care directive take?

An advance care directive shall be either handwritten, dated and signed by the client, or publicly authenticated by a notary. Although there is no obligation to register the directive, we recommend recording its existence and the place where it is kept with the Swiss Civil Register Office.

Who ensures the proper execution of the directive?

If the client becomes incapable, the Adult Protection Authority verifies the form and validity of the directive, as well as the client’s capacity of judgement. This is why the appointee’s duties must be defined as clearly as possible in the directive, in order to avoid any ambiguity. The appointee may also ask the Adult Protection Authority to interpret the directive and to add clarifications to related matters.

Who can be appointed as appointee?

The appointee can be a natural person or a legal entity. We advise appointing a second appointee who can stand in for the first appointee. This avoids any risk of the directive becoming invalid, for example if the first appointee were to die.

Clearly, by appointing a qualified appointee who has the knowledge and skills required to fulfil his/her duties, people can plan for the unexpected and spare both themselves and their loved ones a great deal of trouble. 

Bonhôte Services is able to act as appointee; please contact any member of our team if you would like more information.