Enduring Powers of Attorney
An Enduring Power of Attorney (“EPOA”) is a legal document which sets out who can take care of your personal or property matters if you are unable to. The person named in the EPOA is called your attorney.
These documents can be organised through your lawyer and are governed by the Protection of Personal and Property Rights Act 1988.
What is a Power of Attorney
In New Zealand there are three kinds of Power of Attorney (“POA”) which can be enacted for a range of reasons and to deal with different aspects of your affairs:
- A standard POA;
- An EPOA for property matters; and
- An EPOA for personal care and welfare.
An EPOA takes effect when you lose capacity and are unable to make your own decisions, and continues despite your loss of mental capacity. However, you may elect for an EPOA for property matters to come into effect before you lose mental capacity. A person is presumed to be mentally capable unless it is proved otherwise. A Court or qualified health provider makes a decision about whether someone is mentally incapable.
A standard POA is useful for when you are physically unable to sign documents, which could be due to geography (eg. you are out of the country) or disability (eg. you’ve lost use of your arms). A standard POA can also help with specific tasks on a regular basis, such as allowing your attorney to pay your bills or sign transactional documents on your behalf.
Under a standard POA, your attorney is provided with the right to sign documents on your behalf, but this is immediately revoked if you die or if you lose mental capacity. You can also specify that a standard POA only have effect for a specified time period (for example, the duration of an overseas trip).
EPOA property matters
An EPOA for property matters provides your attorney with the power to make decisions relating to your money and property.
An EPOA for property matters can be used immediately or only if you lose mental capacity. An EPOA does not assume that mental capacity is permanently lost, if capacity is regained, the attorneys authority can be revoked or suspended.
For this type of EPOA, you can have one or more attorneys, or a trustee corporation to act as your attorney.
Personal care and welfare matters
An EPOA for personal care and welfare authorises the attorney to make decisions relating to your health and welfare, such as choosing a rest home or medical treatment.
An EPOA for personal care and welfare matters can only come into effect if you lose your mental capacity. For this kind of EPOA you can only have one individual as your attorney, you cannot appoint two persons or a trustee company. You can however, appoint successor attorneys.
EPOA and Trusts
None of these legal documents are particularly useful when it comes to Trusts. An EPOA for property cannot be used to make trustee decisions or deal with Trust property. This is because the trustee is not making decisions in their personal capacity and the Trust property is not the personal property of the trustee.
The Trusts Act 2019, which came into force on 30 January 2021, makes the process of removing an incapacitated trustee easier. Rather than going to Court, the following people can remove a trustee:
- The person with the power of appointment of trustees; or, if there is no appointer:
- The continuing trustees; or if there are no continuing trustees:
- The person holding an EPOA for the incapacitated trustee.
When an existing trustee retires or is removed, or a new trustee is appointed, executing the deed of appointment, removal, or discharge has the effect of removing ownership of the Trust property from the previous trustees and vesting it in the new or continuing trustees without the need for any transfer, conveyance or assignment (subject to any mortgage or liabilities attached to the property).
If the divesting and vesting need to be notified, recorded or registered under another Act, such as the Land Transfer Act, a copy of the deed and a statutory declaration by the new or continuing trustees is enough to achieve the change in title. The new and continuing trustees can complete any formal requirements on behalf of a former trustee who has lost capacity.
Preparing EPOAs or POAs
EPOAs and POAs are important legal tools which allow trusted persons to take care of your affairs if you are no longer able to. If you have any queries or would like to prepare EPOAs or POAs please reach out to us at Holland Becket Law.