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Alive & Not So Well: Who Will Manage Your Finances When You Can't? 
Family Finance

Alive & Not So Well: Who Will Manage Your Finances When You Can't? 

A few years back, I left work, and in the humdrum of rush hour, I chose to 'browse' around Ngara to wait on traffic to ease up and maybe I'd be home in no time. Thirty minutes pass, and I join the rush hour madness, which often means an uneventful drive and walk. On arriving home, I find the place turned upside down, electronics missing and weirdly, every light on (I still wonder about that part). 

Years later,  I still don’t have the words to capture the shock. For weeks, plus now and then, I wonder, what if I’d walked in on the burglars and got seriously injured? 

It could have easily led to my no longer having the mental, emotional and physical capability to be competent at work and in my personal life. What quality of life would I have? How could I possibly cope? Truthfully, I have no idea - however, I am grateful for the wake-up call.

What is Incapacitation?

A key distinction to keep at the forefront of your mind, is that incapacitation is neither a synonym for death, nor a synonym for incompetent.

With regards to your financial well-being, incapacitation must be declared, according to legal medical definition. A few reasons why one's deemed incapacitated include:

  • Unconsciousness or in a coma due to medical sedation  or serious intoxicating substance effects (like an overdose leading to brain damage)
  • Trauma due to abuse and/or accident, which impacts physical and/or mental ability to make informed, rational judgments
  • Injury due to accidents, violence and/or abuse that causes disability 

Therefore a "legally incapacitated" person is one who can't take care of their own physically and/or mentally well-being. As such, one can't effectively communicate and manage his or her own finances, property or personal care.

All in all, for your and everyone’s benefit - have a plan of action. Knowing that you and your loved ones are on the same page does make such unexpected circumstances easier. It may seem a distant possibility but, nevertheless, it is well within the realm of possibility that may happen to you or a loved one. 

With that in mind, let’s have a written, heart-to-heart on how you can make everyone's lives a bit easier should you unfortunately become incapacitated.

1. Designate Someone To Manage Your Finances (Power Of Attorney)

As long as you're 18+ years and of sound mind, you can appoint a power of attorney for financial management or financial power of attorney. 
In legal terms, this creates a donor-agent or donor-donee relationship: The donor is (you) as the appointing party, and the donee or agent refers to the appointed party.  

Due to the different nature of emergencies and financial management needs, there are three types of power of attorney in Kenya. 

These include:- 

  • General Power Of Attorney - the permission given to the donee/agent is broad. For instance, the donee has the power to act on your behalf in matters about health, and finance, among others. 
  • Irrevocable Power Of Attorney - you (the donor) convey what you would want done on your behalf. This agreement especially applies where a donor is a minor, a relative, a spouse or mentally unfit. 
  • Special Power Of Attorney - in this form of power of attorney, the permissions become limited. It is possible to have different persons (agents) in the role of power of attorney. Each donee/agent has specific instructions on what to carry out on your behalf, as you (the donor) have specified either verbally or in writing to the donee.

What Does This Mean For You

When incapacitated (that is, unable to make decisions for yourself), this option is a reliable, simple and budget-friendly way to plan how someone is to manage your finances. You legally appoint someone to act on your behalf in any matter, including the sale or transfer of land. 

If you cannot rely on family/relatives or don't have a spouse to lean on, you can select a non-relative who has your best interest at heart.

As for your family, a power of attorney agreement is a big win, whether you’re single or married. 

On the bright side, your family avoids the unpleasantness of dealing with a court proceedings and the unavoidable possibility of a court-assigned stranger handling your finances on your and your family's behalf. If you opt to have another agent, you can name an alternate agent. 

When Does A Financial Power of Attorney Agreement Take Effect?

First things first, the individual assigned power of attorney cannot take over your finances at any time. Here are key facts to know:- 

  1. A financial power of attorney does go into effect as soon as you sign it. For example, you and your spouse can have active financial powers of attorney for each other should either become incapacitated. Another scenario where this may apply is when one spouse is often out of town and rarely available to handle financial obligations.
  2. As the donor, specify that you want your power of attorney to be "durable". That means you can protect your order of power of attorney from being void should you become incapacitated.
  3. Only a qualified doctor can deem a person as of sound mind and incapacitated. For this reason, you can specify that a power of attorney does go into effect unless a doctor certifies that you are not incapacitated. This way, you can control your financial affairs (unless and until) you become incapacitated.
  4. According to Kenyan Law, a power of attorney agreement is valid when all parties consent. It is done by appending a thumbprint or signature or any other mark of evidence of personal acceptance. (Sec 44 of the Land Registration Act).

Once the approvals are in place, the parties appear before the registrar with a witness. Once the registrar is satisfied that all are up-to-par, verification is granted (Section 45 of the Land Registration Act)  

  1. You have the choice to decide how much power your agent can have. To give you an idea of what you may want to give your agent authority to do, check these out:-
  • To handle transactions with banks and other financial institutions 
  • To file and pay your taxes
  • To operate your business(es)
  • To use your assets to pay your everyday expenses and those of your family
  • To buy, sell, maintain, and pay taxes on mortgage real estate and other property
  • To collect social security, health insurance, or other government benefits
  • To invest your money in mutual funds, stocks and bonds
  • To claim property you inherit or are otherwise entitled to
  • To fulfil your donation or charity request; for instance, if you donate to a religious institution or charity group at a set schedule, your agent can take up this role   
  • To transfer property to a trust you've already created
  • To hire a legal representative to represent you and your family or dependants in court and whenever needed  
  • To manage your retirement account
  • In addition, you may add other financial obligations you would require catered to  

When Does A Financial Power of Attorney Agreement End?

Remember that a power of attorney agreement applies for persons who are not deceased, so it automatically ends upon your death. 

That means that your agent does not have the authority to handle any financial matters on your behalf after your death, including paying for funeral or burial arrangements.


If you want your agent to handle your affairs after your death, you must legally set up a will to name the "agent" as your executor.

Other instances when a "durable" power of attorney is invalid are when:

  1. A court invalidates the agreement due to the court concluding that you weren’t mentally competent when you signed it, or that you were the victim of fraud or were under undue influence
  2. Your assigned agent or donee is not available. It could be due to the agent's demise, incapacitation, an altered nature of the relationship between you and the agent that's hostile or if the agent isn't a practical choice, for various reasons

2. The Court Will Appoint A Guardian.

Generally, where a power of attorney agreement is necessary but is not in place, decisions about your financial management default back to the laws. 

This option is a last resort, which legally protects your finances. 

This can be due to unique instances where one prefers to have the court oversee their financial management. This option can often be due to estranged family relations, general distrust or not having a suitable candidate to be your “agent”, in which case this is a lawful option.   

What Does This Mean For You

When a court-appointed guardian has the reins, you are significantly limited. You must comply with the court's decisions regarding your finances. 

Secondly, having a court-appointed guardian may not be an ideal option. It can be expensive, (especially) because it often results in assigning a person you don't personally select to manage your finances. 

Even if this is financial-legal protection available to every citizen, it is not a reason to delay or dismiss the better option (i.e. option 1). 

Work with a legal expert to have your power of attorney agreement drafted - to designate a person who can and will manage your finances when you cannot. 


In spite of how unpleasant this possibility may sound, consider this a motivator to start setting up your power of attorney plan.

So, rather than going through the motions of life in “whatever happens, happens” mode, be mindful of how important it is to protect your financial wellbeing when you’re alive but out-of-commission.

The flip side of being unprepared for this can be heightened family strife, misallocation of resources you spent years accumulating and possible dispossession of your dependents if responsibility falls on selfish individuals. 

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Gathoni is a skilled content developer with over 5 years of experience in content development as a graphic design and copywriter, in different industry sectors. Her passion to nurture positive, stronger, communication impact continues. You can find her on LinkedIn here.

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