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Who will care for you, your business and your dependants in the event of incapacity?

(3 minutes reading for anyone involved in the construction industry during the war)

By Adv. Shlomi Hadar ***

The stress that war creates can lead to troubling thoughts of death, disability and questions such as: What happens if I lose the ability to take life decisions, or if my health, property or business is affected due to an event which leads to a situation of incapacity. What action can I take now to cope with such an eventuality, heaven forbid?

The Israeli legislator was aware of the need to create a mechanism to make provisions in the event of incapacity by appointing someone to take decisions in our place. Following extensive discussions a legal tool was devised to manage risks to enable us – before it is too late – to control our lives in the event of incapacity, based on the perception that one can and should determine their future and fate.

The name of this legal tool is lasting power of attorney.

Since this tool was enacted, we have accumulated extensive experience in ascertaining needs of our clients and tailoring the wording of the lasting power of attorney to their individual needs, whether they are a developer, business owner, self-employed individual or controlling shareholder of a company.


We would highlight that to differentiate from a lasting power of attorney, appointing a legal guardian (a bureaucratic process which is subject to court directives and approval by the Administrator General of the Ministry of Justice) can potentially lead to loss of property, collapse of businesses, erroneous decisions being taken due to lack of familiarity with the business (for example, in the case of a business based on personal trust or where the business is based on key personnel) or the complexity of family relations and frequently leads to disputes and ambiguity between dependants and family members.

For whom is a lasting power of attorney suitable?

Arranging a lasting power of attorney is suitable for anyone over the age of 18 who wishes to appoint someone in advance to deal with their affairs in the event of the incapacity and to give instructions of how to act.

The future will one day become the present, at which time we will have to accept the consequences of our previous actions. It is therefore important to set aside thoughts such as “It won’t happen to me” or “War is not the time to think about the future” and other thoughts that lead us to postpone a simple action that can provide an immediately solution if an untoward event occurs.

Anyone involved in the construction industry knows well that time and immediacy are essential elements of managing the business, that the prolongation of a project due to faulty management or procrastination in appointing key personnel and the like due to legal bureaucracy can lead to losses and may have devastating economic consequences.


Accordingly, and particularly during periods of uncertainty and security threats it is both important and urgent to take decisions and make suitable plans for a case of incapacity – an event involving the loss of mental capacity to function and take decisions.

The common denominator between arranging a lasting power of attorney and arranging an insurance policy is the uncertainty concerning the future and the need we all have to mitigate risks and care for our family and business interests. In a time of war, there is more uncertainty and the risk of an event which leads to physical injury or incapacity is much greater.

An income protection insurance policy can provide a financial solution or other relief and anyone who does not hold such a policy would be well advised to arrange one, however it does not provide a practical plan of action in the event of incapacity. An insurance policy does not actualise our wishes in the event of incapacity or provide the ability to control our affairs if we lose the ability to do so.

It is essential that anyone arranging a lasting power of attorney understands the ramifications, aims and consequences of empowering another person and hence it should be done at a time when we are of competent and sound mind.

How to decide who to appoint (the “appointee”):

The decision of who to appoint as a power of attorney will usually be based on trust and a close relationship between the appointer and the appointee, such as a spouse, family member, business partner or close friend, or someone with specific professional knowledge or expertise.

The appointer can decide to appoint a single appointee or several appointees. The appointer should decide whether the appointee is authorised to takes decisions alone or should do so together with others and should determine the division and scope of authority between each appointee.

Fees: The appointer is entitled to determine that the appointee will be entitled to receive a fee. In such a case, the appointer will need to specify the scope of the fee payable to the appointee. The appointee should also be entitled to a reimbursement of reasonable expenses incurred during the course of performing their duties.


How to arrange a lasting power of attorney.

A lasting power of attorney is a legal document which is arranged between the appointer – who personally decides who will deal with their affairs if and when they lose the capacity to do so – and the appointee, who is authorised to act in accordance with the instructions of the appointer.

After establishing the needs and wishes of the appointer, usually following an in-depth process of considering needs, wishes and any legal restrictions that might arise during the course of carrying out the power of attorney (with the professional advice of a lawyer), a power of attorney is drawn up and signed before a lawyer or notary, who does not have a vested interest in the power of attorney and who has been licensed by the Administrator General of the Ministry of Justice to prepare a lasting power of attorney.

Similar to arranging wills and agreements, which are sometimes arranged hastily, we have found that flippancy and inexperience in arranging a lasting power of attorney can lead to major problems in carrying out the wish of the appointer, especially as far as legal restrictions or relevant third parties (such as partners, family members, parties to contracts and written and unwritten agreements) are concerned.

It is therefore essential that the lasting power of attorney gives due weight and consideration to the far reaching consequences and ramifications of such a tool and all of these matters should be considered in detail and discussed at length before arranging it with a professional, reputable and qualified lawyer.

*** Adv. Shlomi Hadar is a partner of John Geva Hadar Law Offices and Mediators. He is an external legal adviser to Itzick Simon Insurance Agency Ltd. and holds a license from the Administrator General of the Ministry of Justice to arrange lasting power of attorneys.

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