Enduring Power of Attorney in New Zealand: What You Need to Know

An Enduring Power of Attorney (EPA) is a legal document that allows someone to make important decisions on your behalf if you are unable to do so due to illness, accident, or diminished mental capacity. In New Zealand, having an EPA in place is essential for ensuring your financial and personal affairs are managed according to your wishes. Understanding how an EPA works and why it is important can help you plan for the future with confidence.

What is an Enduring Power of Attorney?

An Enduring Power of Attorney is a legal arrangement where you (the donor) appoint someone you trust (the attorney) to make decisions for you if you become unable to manage your own affairs. There are two main types of EPAs in New Zealand:

• Property EPA: Gives your chosen attorney authority to manage your financial and property matters. This can take effect immediately or only when you lose mental capacity.
• Personal Care and Welfare EPA: Allows your attorney to make decisions about your health, medical treatment, and personal care, but only if you become mentally incapable.

These EPAs ensure that your affairs are handled smoothly without the need for court intervention, which can be costly and time-consuming.

Why is an Enduring Power of Attorney Important?

Many people assume that their family will automatically be able to make decisions for them if they are unable to do so. However, in New Zealand, this is not the case. Without an EPA, your loved ones may have to go through a legal process to gain decision-making authority, which can be stressful and expensive.

An EPA provides peace of mind by ensuring that a trusted person will act in your best interests. It is particularly important for older adults or those with medical conditions that could affect their decision-making ability in the future.

Choosing the Right Attorney

Selecting the right person to act as your attorney is a crucial decision. They should be someone you trust completely, as they will have significant control over your personal or financial matters. Many people choose a spouse, adult child, or close friend. In some cases, a professional such as a lawyer or trustee company may be appointed.

It is also possible to set limits on what your attorney can do and to include instructions to guide their decisions. Regular reviews of your EPA can help ensure it remains suitable as your circumstances change.

How to Set Up an Enduring Power of Attorney

Setting up an EPA in New Zealand requires a legal process. You must complete specific forms and have them signed in the presence of a lawyer, a registered legal executive, or a representative of a trustee company. They will ensure you fully understand the implications before signing.

While there are costs involved, having an EPA in place can save time and money in the long run by avoiding court proceedings if you lose capacity. Many people choose to set up an EPA as part of their broader estate planning.

Reviewing and Updating Your EPA

Life circumstances change, and your EPA should be reviewed periodically. If your chosen attorney is no longer suitable due to changes in their life or your relationship, you may need to update the document. Reviewing your EPA ensures that it continues to reflect your best interests and wishes.

Having an Enduring Power of Attorney in place is an essential step in safeguarding your future. By planning ahead, you can ensure that your affairs are managed by someone you trust, providing security and peace of mind for both you and your loved ones.