Enduring powers of attorney (EPAs) are documents that allow a person, known as the donor, to appoint an attorney (or attorneys) to handle their property affairs and make decisions about their care and welfare if the donor is no longer able to manage these affairs themselves.

What is an enduring power of attorney?

An EPA is a specific power that remains effective when the donor loses mental capacity. Unlike a standard/ general  power of attorney, which ceases to be valid if the donor becomes incapacitated, an EPA ensures that a trusted person or people can continue to make decisions on the donor’s behalf and in their best interests. Note though that the EPAs only apply while the donor is living; when a donor passes away, the EPAs automatically comes to an end.

Types of enduring powers of attorney

In New Zealand, there are two types of EPAs:

Enduring power of attorney for property: This document allows the appointed attorney to manage financial and property matters e.g. handling bank accounts, paying bills, managing investments, and dealing with property transactions. An attorney can do everything with the property that the donor can do. The donor can, if they want, also impose limits or restrictions on what the attorney can - or can't - do. The donor decides when the EPA for property takes effect, either immediately on signing the EPA or only when the donor is deemed to lack capacity (if the latter, a doctor will determine this). The donor can also appoint more than one person to act at the same time in relation to their property.

Enduring power of attorney for personal care and welfare: This document permits the attorney to make decisions regarding the donor’s personal well-being. This includes medical decisions and living arrangements e.g. if the donor requires rest home or hospital-level care. It does not extend to the attorney making end of life decisions (that is usually best dealt with by another document called an 'advance directive'). The EPA for personal care and welfare comes into effect only when the donor has been assessed by a doctor as lacking capacity. Only one attorney can act at any one time in relation to personal care and welfare.

A donor can appoint the same person to act for both property and for personal care and welfare. It is also sensible for a donor to appoint a successor attorney to act if the originally appointed attorney is unable to.

Why are enduring powers of attorney important?

EPAs are essential for several reasons:

Continuity of management: It ensures that there is a designated person or people who can step in to manage the donor’s affairs without the need for court intervention, which can be time-consuming and costly. Despite the myth that next of kin can make decisions for a person who does not have capacity, only EPAs and court orders provide the requisite authority.

Control and choice: It allows a donor to choose someone they trust to act on their behalf, rather than having the decision made by a court, which might not align with the donor’s preferences.

Planning ahead: Capacity can be lost at any stage, either temporarily or permanently. By creating EPAs, donors can ensure their affairs are managed according to their wishes, providing peace of mind for both themselves and their families.  

Legal requirements and considerations

To be valid, EPAs must meet specific legal requirements:

Capacity: The donor must have capacity when creating the EPA. This means they understand the nature and effect of the documents.

Formalities: The EPA must be signed by the donor in the presence of an eligible witness, that is a lawyer, registered legal executive or officer of a trustee corporation such as the Public Trust. The chosen attorney(s) must also consent to their role and are required to sign in front of a witness, who could be a colleague, neighbour or acquaintance.

Revoking an enduring power of attorney

The donor retains the right to revoke or change an EPA as long as they have capacity. This flexibility allows for adjustments in response to changing circumstances, such as a change in the donor’s preferences or personal situation.

A person, when acting as attorney, should also be required to provide a certificate of non-revocation, confirming they have no notice of the death of the donor or the suspension or revocation of the EPA.

If you need to create or update your enduring powers of attorney, contact our Trusts and Private Client specialists.

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