Enduring Power of Attorney – Everything You Need to Know

Enduring Power of Attorney – Everything You Need to Know

By: MBC Law
November 9, 2017

The thought of passing over the power of your decision making may seem like a daunting prospect, but what would happen to your financial affairs, health or assets if you are no longer in a position to decide for yourself? An enduring power of attorney (EPA) will give you the peace of mind that major life decisions concerning you, will be made in your best interest by someone you trust.

There are two types of EPA’s to act on your behalf regarding personal care and welfare, or property related matters.

Enduring Power of Attorney for personal care and welfare

An enduring power of attorney for personal care and welfare only comes into effect when the donor is considered to have lost mental capacity by a healthcare professional. The nominated individual (attorney) is responsible for the decisions regarding the donor’s welfare including where they live and any medical treatment. The attorney does not get to make decisions relating to marriage or divorce, or refuse beneficial treatment. You may only have one attorney for this EPA.

Enduring Power of Attorney for property

An enduring power of attorney for property can come into effect when the donor specifies, or when the donor becomes mentally incapable of managing their own affairs. The attorney can be responsible for paying the bills, managing bank accounts and buying or selling assets on behalf of the donor. You may have more than one attorney for this EPA.

Choosing an Enduring Power of Attorney

Your attorney (s) will have full control of your interests so it is essential that you choose someone you trust and who will respect your wishes. Your attorney doesn’t have to be related, but is usually a friend or family member who will act in your best interest. It is a good idea to choose a trusted attorney around the time you are updating your will, and still of sound mind. Losing our mental capacity is not a nice thing to think about, but anyone can lose their ability to make decisions through age degeneration or an accident.

Do I still need a Will if I have an Enduring Power of Attorney?

An EPA comes into effect when the donor is alive and has specified for the attorney to make the decisions on their behalf (property) or when the donor becomes mentally incapable. The EPA ends when the donor dies, so it is essential that there is a valid will in place. Without a will, your assets will be distributed in accordance with the Administration Act 1969. While your estate is still distributed between your existing family, you don’t get to manage who gets what and how.

Can I change my attorney?

You can change your nominated attorney at any time as long as you are still considered mentally capable. If your loved ones believe your nominated attorney is not acting in your best interest, they can be challenged in the Family Courts.

Who decides that I am no longer capable of making decisions?

A qualified healthcare professional will carry out the assessment to determine the donor’s mental capacity. Attorneys cannot make any decisions on the donor’s behalf unless they obtain a medical certificate stating that the donor is mentally incapable. If the donor believes that they are still of sound mind, they can challenge the outcome and be referred to a specialist for further assessment. They can also approach the Family Courts to reassess the decision.

What happens if I do not set up an Enduring Power of Attorney?

You should not assume that the control of your welfare or property will go to your surviving spouse. An EPA is a legal document, and without one it may be left to the court to decide what to do about your private and personal matters which may not always result in the outcome you would have wished for. An EPA will also relieve the existing family of any stress if they are left to pay the bills if the money is tied up in a will.

How do I set up an Enduring Power of Attorney?

As an EPA is a legal document, you will need to go through your lawyer. MBC Law can offer you friendly confidential advice to put you at ease when writing your will or choosing an EPA. We offer our clients honest and impartial advice, so you can rest at ease knowing the decisions you are making are the right ones.

Contact us today for a reviewal of your will and to put some protection in place should the worst happen in your lifetime.

These articles discuss New Zealand law, and are for informational purposes only. They do not constitute professional legal advice. Please consult MBC Law for information specific to your circumstances.