Who Speaks for You? Why Every Adult Should Have an Enduring Power of Attorney

Most people understand the importance of making a Will. Far fewer consider what would happen if they were still alive but no longer able to make decisions for themselves.

Whether caused by illness, dementia or a sudden accident, losing mental capacity can happen at any stage of life. Without an Enduring Power of Attorney (EPA), even your closest family members will generally have no legal authority to manage your financial affairs or make important decisions about your personal care and welfare.

An EPA allows you to decide, in advance, who will make those decisions on your behalf if you lose the capacity to do so yourself. It is one of the most important legal documents you can put in place to protect both yourself and your family.

Understanding Enduring Powers of Attorney

An Enduring Power of Attorney is a legal document that allows you (the donor) to appoint a trusted person (your attorney) to make decisions on your behalf if you lose mental capacity.

New Zealand law provides for two different types of EPA, and in most cases it is advisable to prepare both.

EPA for Property

A Property EPA authorises your attorney to manage your financial affairs. This may include operating bank accounts, paying bills, managing investments, collecting income, buying or selling property, and attending to other financial matters on your behalf.

You may choose for your Property EPA to take effect immediately, or only once you have been certified as mentally incapable. Many people choose the immediate option because it can also be helpful during periods of illness, overseas travel or reduced mobility.

EPA for Personal Care and Welfare

A Personal Care and Welfare EPA allows your attorney to make decisions about your health, medical treatment, living arrangements and general welfare.

Unlike a Property EPA, it only becomes effective once a medical practitioner certifies that you have lost mental capacity.

While you may appoint more than one attorney to act jointly for Property matters, you may appoint only one primary attorney for Personal Care and Welfare, although successor attorneys can also be nominated.

What Happens If You Lose Capacity Without an EPA?

If you lose mental capacity without an EPA, your family cannot simply step in and manage your affairs.

Instead, they will generally need to apply to the Family Court under the Protection of Personal and Property Rights Act 1988 for the appointment of a Property Manager and/or Welfare Guardian.

This process can involve:

• legal costs and Court fees;

• medical evidence and supporting documentation;

• delays while the application is determined;

• ongoing reporting obligations; and

• the possibility that the Court appoints someone other than the person you would have chosen.

Having valid EPAs in place will, in most cases, avoid the need for this Court process and provide certainty for both you and your family.



Why Prepare an EPA Early?

Many people associate EPAs with old age. In reality, loss of capacity can occur at any stage of life.

Preparing an EPA early offers several important benefits:

• You remain in control by choosing who will make decisions on your behalf.

• You can provide guidance by including conditions or directions for your attorneys.

• Your family gains certainty during what is often an already stressful time.

• Business owners can ensure continuity, allowing someone they trust to manage financial affairs if they become incapacitated.

Perhaps most importantly, an EPA provides peace of mind that your affairs can continue to be managed without unnecessary legal complications.

Choosing the Right Attorney

Choosing an attorney is one of the most important decisions you will make.

Your attorney should be someone you trust completely—someone who is responsible, financially competent and capable of making decisions in your best interests.

It is also worth considering whether they are willing to accept the role, able to communicate effectively with other family members where appropriate, and likely to remain available in the future.

Many people also appoint successor attorneys to ensure continuity if their first choice is unable or unwilling to act.

Creating a Valid EPA

Because an EPA gives another person significant legal authority, New Zealand law includes important safeguards.

To be valid:

• you must have mental capacity when signing the document;

• your signature must be witnessed by an independent lawyer, qualified legal executive or authorised officer of a trustee corporation;

• the witness must explain the legal effect of the document and certify that you understand it and are signing voluntarily; and

• your attorney must formally accept the appointment.

These requirements help protect vulnerable people from undue influence and financial abuse.