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Written by Tal Kaufman, Partner, Wealth Management and Intergenerational Transfer, ABADI & CO - Law Firm
A will determines who will inherit a person’s property after their death. Its main purpose is to ensure that the assets you have built over your lifetime are distributed according to your wishes. If someone dies without a will, their estate is divided according to the rules of the Inheritance Law.
A will only takes effect after death and does not address how your assets are managed or how you are cared for during your lifetime. A will cannot be used to decide how your property should be handled if you become unable to manage your own affairs, or how you wish to be treated medically or personally.
An Enduring Power of Attorney (EPA) is the legal instrument that allows someone to manage your financial, medical, and personal affairs if you are alive but unable to do so yourself. Unlike a will, an EPA is primarily effective during your lifetime. Once the person passes away, the EPA ends, and the will governs the distribution of assets.
Purposes of an Enduring Power of Attorney
Peace of Mind
An EPA allows you to appoint trusted family members or close individuals to handle all your affairs, giving you confidence that your needs will be met.
Control
By setting clear instructions for your agents about managing your money, approving medical procedures, and maintaining your desired standard of living, you continue to have control over your life, assets, and health.
Family Harmony
An EPA clarifies the responsibilities and limits of each agent, preventing disputes, doubts, and conflicts among your loved ones.
If you already have a will, it is crucial to inform your lawyer when drafting your EPA. This ensures that the instructions in the EPA do not conflict with your will, so that your estate is preserved according to your wishes and not diminished by contradictory instructions. In many cases, clients who prepared an EPA later chose to update their wills to reflect their current intentions.
Financial Considerations
When preparing an EPA, it is essential to work with a lawyer experienced in financial and pension matters, as the law requires specific attention to pension products. Our firm specializes in financial planning and wealth management. Attorney Tal Kaufman, who also holds a pension license from the Ministry of Finance, is well versed in tailoring your EPA instructions to your pension structure and family assets.
Consider carefully how to instruct your agents regarding your accumulated pension funds and other financial resources, to ensure they are preserved and used efficiently even if you lose cognitive capacity.
Questions to ask yourself regarding finances:
- If I need expensive medical care, which funds will cover it?
- Do I have private health insurance?
- If my liquid funds are insufficient, should I withdraw from savings or sell investments? What taxes might apply?
- If I require long-term care, how and where do I want to be treated, and how will I fund it?
- Have I arranged coverage through my health plan or private insurance?
- Long-term care insurance usually covers only a limited period; how will I fund ongoing care after that?
- Should I sell my property to pay for private care facilities?
Burial Instructions
Before the EPA law was enacted in Israel, burial instructions were included only in wills. In practice, these often had little effect because the will was opened after the burial, making it too late to act according to the deceased’s wishes.
An EPA allows you to provide explicit burial instructions in advance, while you are alive. Your agents will read these instructions and prepare accordingly, ensuring your wishes are respected. You may also authorize them to use your financial resources to cover burial expenses.
