If you’re a resident of New Zealand and thinking about securing your future, one important legal document to consider is the Enduring Power of Attorney (EPA). In this article, we will walk you through everything you need to know about Enduring Powers of Attorney in New Zealand. As someone with over 5 years of experience in banking and insurance, I’ll explain it in simple terms, focusing on its importance and how you can use it to safeguard your interests.
What is an Enduring Power of Attorney (EPA)?
An Enduring Power of Attorney (EPA) is a legal document in New Zealand that allows you to appoint someone (known as an attorney) to make decisions on your behalf in the event that you become incapable of managing your affairs. This could be due to an accident, illness, or even the natural process of aging.
Unlike a standard Power of Attorney, which becomes invalid if you lose mental capacity, an EPA remains valid even if you are no longer able to make decisions for yourself. This makes it an essential tool for ensuring your financial, personal, and healthcare decisions are managed by someone you trust, even when you’re unable to do so yourself.
Types of Enduring Powers of Attorney in New Zealand
In New Zealand, there are two main types of Enduring Powers of Attorney: one for Property and one for Personal Care and Welfare.
- Enduring Power of Attorney for Property
- This type of EPA allows your attorney to make decisions about your finances, such as managing your bank accounts, paying bills, and making investments. It can be activated either when you lose mental capacity or at a specific time you decide, like while you’re overseas.
- Enduring Power of Attorney for Personal Care and Welfare
- This EPA is concerned with decisions about your personal welfare, such as medical treatment, living arrangements, and general health care. It is only activated when a doctor confirms you are no longer capable of making these decisions on your own.
Why is an EPA Important in New Zealand?
Creating an Enduring Power of Attorney ensures that someone you trust can act in your best interest if you become mentally incapacitated. Without an EPA, if you lose the ability to make decisions, your loved ones may have to apply to the courts for guardianship, which can be a lengthy and costly process.
An EPA gives you peace of mind knowing that you have chosen someone who understands your values and will make decisions in line with your preferences. It’s also a proactive way of managing your affairs, allowing you to avoid unnecessary complications in the future.
Who Should You Appoint as Your Attorney?
Choosing an attorney is one of the most important decisions you will make when setting up an EPA. It’s essential that your chosen person is trustworthy, reliable, and capable of making sound decisions on your behalf. Here are a few key considerations:
- Trust: Your attorney will have control over your finances or personal care, so choose someone who has your best interests at heart.
- Competence: Select someone who is capable of managing the responsibilities that come with the role.
- Age and Availability: It’s advisable to appoint someone who is of a reasonable age and likely to be around when needed.
You can also choose to appoint more than one attorney, providing flexibility and additional protection.
The Process of Creating an EPA
Creating an EPA involves several steps. Here’s a simple guide to the process:
- Choose Your Attorney: Select the person or people who will act as your attorney.
- Complete the Legal Form: You will need to complete the appropriate forms for either Property or Personal Care and Welfare.
- Sign the Document: You must sign the EPA in front of a witness. The witness cannot be your attorney or anyone with a conflict of interest.
- Get Professional Advice: While it’s not mandatory, it’s often a good idea to seek legal advice to ensure everything is properly set up.
Can You Change or Cancel an EPA?
Yes, you can change or cancel an EPA at any time, as long as you are mentally capable of doing so. If you want to make changes, you’ll need to follow the same legal process as when you first set it up.
If you want to cancel the EPA, you can simply revoke it in writing. It’s important to notify your attorney and any relevant institutions (such as your bank) that the EPA is no longer in place.
How Do You Activate an EPA?
In the case of a Property EPA, it can be activated when you lose mental capacity, or it can be set up to begin at a specific time. For a Personal Care and Welfare EPA, it is only activated once a medical professional confirms that you are unable to make decisions regarding your welfare.
Key Benefits of Having an EPA
- Ensures Your Wishes Are Followed: An EPA allows you to make your wishes clear in advance, so your attorney can make decisions that align with your values and preferences.
- Avoids Court Intervention: Without an EPA, your family may need to apply to the court for guardianship, which can be a time-consuming and expensive process.
- Peace of Mind: Knowing that you’ve appointed someone who will take care of your affairs if necessary gives you peace of mind.
Final Thoughts
An Enduring Power of Attorney is a crucial part of planning for the future in New Zealand. It ensures that your financial and personal care decisions will be handled by someone you trust, even if you are no longer able to make those decisions yourself. If you don’t have one, it’s worth considering the peace of mind it can offer you and your family.
Remember, creating an EPA is a step toward protecting your future. Don’t wait for an emergency to think about it—take action today!