Enduring Powers of Attorney 09 Dec 2011

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 affairs 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 affairs. 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 for the rest of your life.

What is an Enduring Power of Attorney?
An EPA is a document where you appoint another person to make decisions on your behalf if you are unable or do not wish to.

There are two types of EPA - one specific to your financial affairs and the other specific to your personal care and welfare.

How to make an Enduring Power of Attorney
In 2008 the New Zealand government amended the law relating to EPAs to address concerns over the misuse of EPAs.  The goal was to ensure that those making EPAs understand the powers they are giving to their attorney and are not pressured into signing the EPA.

Under the rules now in place 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.

Because of this change, it will now involve some extra time and cost to get an EPA.  For example, if we act for both you and your attorney, you may need to see a solicitor outside our firm to have the EPA signed.  However, 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.

Being an Attorney
The 2008 changes also imposed new responsibilities on attorneys including:

Personal care and welfare attorneys have similar duties. In addition:

These new requirements don't apply to existing property EPAs which were stated to come into effect immediately or where the person who made the EPA is already mentally incapable.

If I have an existing EPA, do I need to make a new one?
No, you do not have to make a new one.  However, the new criteria do allow you to be more specific about how you want your affairs managed. You may wish to consider revising your EPAs to take advantage of these changes.

Any person acting as an attorney under an EPA should also inform themselves about the new requirements to ensure that they comply with them.

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 Tim Rankin or Grant Adams (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.