In February 2009, the New Zealand Government announced an intention to increase the Disputes Tribunal jurisdiction limits.  Presently, claims are limited to $7,500.00, or $12,000.00 if the defendant agrees. These limits are to be lifted to $15,000.00 and $20,000.00 respectively.

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When a New Zealand company goes into liquidation, the liquidator can ask its creditors to refund payments they received prior to the liquidation. Parry Field Lawyers provide advice designed to help creditors avoid this risk.

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Dealing with the death of a friend or family member can be taxing but, if you have been appointed a trustee in their Will, there is often more work to do after the funeral. What does it all mean?

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If you are married, or in a civil union or de facto relationship, New Zealand’s Property (Relationships) Act 1976 will have an impact on what happens to your property in the event of separation or death.

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What would happen to your affairs if you lost the capacity to handle them yourself?

If you don’t have an enduring power of attorney (EPA), managing your property or care and welfare can be extremely difficult.  Family and friends don’t have an automatic right to make decisions on your behalf.  In most cases, if you want someone else to have authority to handle your affairs you need to arrange that ahead of time.

In New Zealand, if you become incapacitated without an EPA in place, your family and/or friends must apply to the Family Court before they can do anything to help with your property or welfare and care. This takes time and is considerably more expensive than making an EPA.  It may also provoke family tensions as family members may not always agree on who should be appointed.  The Court may also appoint someone who you don’t wish to make decisions on your behalf.

Everyone, regardless of age, should make an EPA. Tomorrow may be too late. A car accident or stroke could leave you incapable of making key decisions for yourself either temporarily or for the rest of your life.

What is an Enduring Power of Attorney?

An EPA is a document where you appoint another person (called your attorney) to make decisions on your behalf if you are unable or (in some circumstances) do not wish to.

There are two types of EPA – one specific to your financial and property matters and the other specific to your personal care and welfare.

How to make an Enduring Power of Attorney

The format of the EPA document is prescribed by statute. The person making the EPA (‘the donor’) must have their signature witnessed by a lawyer, officer of a trustee corporation or a legal executive, all of whom must be  “independent” of the attorney.  The witness must certify that he or she has fully explained the rights and obligations under the EPA to the donor and that that person was of sound mind and able to understand its effect.

If we act for both you and your attorney, you may need to see a solicitor outside our firm to have the EPA signed (we can still prepare the documents and assist with arranging the independent lawyer appointment if you wish).  As noted above, we consider it extremely important that everyone has an EPA.  The cost of making an EPA will always be less than the cost involved if you don’t have one and need someone to manage your affairs.

Care and Welfare Enduring Power of Attorney

A personal care and welfare attorney can only act on any “significant matters” relating to the donor’s personal care and welfare where a medical practitioner has certified that the donor is mentally incapable.  A “significant matter” is one that is likely to have an important effect on the health, wellbeing or enjoyment of life of the donor – for example, a major medical procedure or change of the donor’s residence.  Unless the medical certificate specifies that the donor’s mental incapacity is likely to be ongoing, a new certificate will be required each time the attorney acts under the EPA.

The attorney must consider the financial implications of his or her decisions and must take into account any advance directives given by the donor, especially concerning medical treatment.

You can only appoint one person to act as your attorney at any time but you can appoint a substitute attorney to step in if the first person becomes unable or unwilling to act for you.  You can also include a requirement that your attorney consult other people such as family members or give them information about the decisions the attorney is making for you.

Property Enduring Power of Attorney

A property attorney looks after your financial, investment and real estate matters.  There are more options for how your property attorney can act compared to the care and welfare attorney.  These include:

  • You can have more than one person acting either together or on their own;
  • You can appoint substitute attorney(s) to step in if the first person becomes unable or unwilling to act for you;
  • You can have the attorney able to act on your specific instructions while you have mental capacity and continue if you lose capacity. This can be helpful if you become physically incapacitated.  Or you can restrict the authority to only begin if you have been medically assessed as not having mental capacity to make your own decisions.
  • You can require your attorney to consult with or give information to other people;
  • You can empower your attorney to make gifts and donations on your behalf if you wish;
  • You can allow your attorney to act to their own benefit for example if they own property with you jointly or for out of pocket expenses. All other actions must be solely in your best interests;
  • You can provide the right for your attorney to apply to the Family Court if for some reason your will is out of date and needs to be changed;
  • You can restrict what property your attorney has power over.

Ending an Enduring Power of Attorney

All EPAs come to an end on the donor’s death.  If you have mental capacity you can also revoke an appointment if you change your mind about who you want to act for you.  Notice of the cancellation needs to be given to the attorney and we can assist with that.  The court can also cancel an EPA if it believes the attorney is not acting appropriately.

If you have been appointed as an attorney you can disclaim that appointment if you want to stop acting.  Again we can assist with the appropriate notice.

Please contact us

EPA’s are essential documents for people of all ages and it is much easier to put these in place before they are needed.  If you wait until you think you are losing capacity it may be too late and you may not have advance warning of an accident or medical event.  We can also assist if you are acting as an attorney and have questions about the role or actions you plan to take.

You should talk to your lawyer at Parry Field about making an Enduring Power of Attorney.  To discuss making an EPA or acting as an Attorney please contact Luke Hayward or Jo Mechaelis-Wall (03 348-8480).

The information contained in this outline is of a general nature, should only be used as a guide and does not amount to legal advice. It should not be used or relied upon as a substitute for detailed advice or as a basis for formulating decisions. Special considerations apply to individual fact situations. Before acting, clients should consult their Parry Field Lawyer.

 

 

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The inclusion of de facto relationships within New Zealand’s Property (Relationships) Act 1976 (“the Act”) effectively means de facto couples receive similar treatment, concerning disputes about property, to those who are married.

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Do you and your married spouse own and live in your home? Are either of you self-employed or involved in some occupation that involves personal exposure to financial risks(e.g. personal guarantees)?  If you answer ‘yes’ to both these questions you should seriously consider registering your home under the Joint Family Homes Act 1964. It could prove to be very cheap protection against losing equity in your home in the event of being sued or bankrupted.

 

What is a Joint Family Home?

Most people think their home is registered as a joint family home because both their names are on the title. This is WRONG! It requires a special application to the Land Titles Office for your home to be registered as a Joint Family Home (“JFH”) under New Zealand’s Joint Family Home Act 1964.

The cost is between $500.00 – $1,000.00 plus GST. Costs vary depending on whether or not you wish to publicly advertise the application. The advantage of advertising is that the protection takes effect within six months rather than the standard two years after application. Also your bank may charge a small fee if you have a mortgage.

What is the Protection?

You will not be protected against secured creditors e.g your mortgagee, but part of your property will be protected against unsecured creditors; e.g. trade creditors to your business, if it is not a company.

Essentially the Joint Family Home Act 1964 creates a protected fund of $103,000 which is safe from unsecured creditors. This fund is to assist in the purchase of a replacement home unless unsecured creditors convince the High Court of New Zealand to exercise its discretion and agree to the sale of the home. (In practice creditors are reluctant to apply to the Courts because of high cost, and the reason that a judge has to balance the general desirability of preserving the matrimonial home for the family on the one hand against the just claims of creditors on the other.)

The Court cannot order the sale of a JFH home if there is less than $103,000 equity in the home. A mortgagee,however, can sell the home (in the event of default) no matter what equity the owners have. The protection is all the more worthwhile if the matrimonial home has previously only been registered in the name of one spouse.

Summary

For quick protection against creditors, some lawyers think a JFH application is more secure than selling the property to a family trust and dealing with the debt back. While this is debatable ,especially at higher levels of equity, it is certainly more affordable. Protection, however, can be lost if it is found at the time of application that the parties were unable to pay all their debts (other than those charged against the house) without recourse to the house sale proceeds.

One way to view the application is as a type of insurance. The insurance is cheap and involves a once only payment which is good for as long as you own the house. It is a simple procedure and the loss is small even if, at the end of the day, protection is not achieved.

Also for a small fee the registration can be transferred to your next home, and registration does not preclude transferring ownership to a family trust later on.

There are a couple of catches : a) you must be legally married to apply for a JFH, and b) if you die, the property automatically goes to the surviving spouse regardless what your Will says!

There are other criteria to satisfy also, so you should contact your Parry Field Lawyer to see if there are advantages for you in registering your home as a Joint Family Home.

 

This article is not a substitute for legal advice and you should talk to a lawyer about your specific situation. Should you need any assistance with this, or with any other Relationship Property matters, please contact Hannah Carey at Parry Field Lawyers (348-8480) hannahcarey@parryfield.com

You may be aware that the Domestic Violence Act 1995 provides a means to give protection to any person who has shared a domestic relationship with another person, and who has then been subjected to violence by that other person. But are you aware that there is also an Act that protects those being victimised by someone other than a person with whom they have shared a domestic relationship? 

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Section 15 of New Zealand’s Property Relationships Act 1976 was introduced to address issues of inequality between partners following a breakdown of their relationship. The section empowers the Court, following a division of relationship property, to compensate a spouse/partner if his or her living standards and income will be significantly less than the other party because of the division of functions in the relationship.

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New Zealand’s Employment Relations Act 2000 is designed to recognise and address the perceived inherent imbalance of power in the employment relationship by promoting collective organisation of employees and collective bargaining, through unions.

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