Enduring Powers of Attorney - Recent Changes

Enduring Powers of Attorney – Recent Changes

Amendments to the Protection of Personal and Property Rights Act 1988 introduced plain language forms of Enduring Powers of Attorney (EPA) and standard explanation documents outlining the effects of appointing an attorney. These changes came into effect on 16 March 2017.

EPAs defined

An EPA is a legal document that allows an individual (called the Donor) to appoint another person or persons (called the Attorney(s)) to take care of their personal care and welfare and/or property if the Donor loses the ability to do so themselves. This appointment does not prevent the Donor from managing their own affairs while they have capacity. EPAs cease to have effect upon the Donor’s death.

In contrast, a General Power of Attorney is valid only when the Donor has the legal capacity to instruct the Attorney(s).

Property

An EPA for property allows the Attorney(s) to deal with the Donor’s property: for example, shares, land and money, subject to any conditions the Donor may include. The Donor may wish the EPA to take effect once signed and continue to apply if he/she is mentally incapable; or only to take effect if he/she becomes mentally incapable.

Personal care and welfare

This EPA allows an Attorney (only one Attorney may be appointed at any one time in respect of personal care and welfare) to make decisions about the Donor’s personal care and welfare if he/she becomes mentally incapable. This power is subject to various safeguards and extends to decisions on any medical treatment required and whether the Donor attends hospital or becomes a resident in a residential care facility.

Under this EPA, the Attorney’s powers can be general or specific depending on the Donor’s wishes.

Changes made

The key change to the law is that instead of instructing a lawyer to create the EPA document itself, there are now forms available for download for both types of EPAs for Donors to complete themselves. The EPA forms must still be witnessed by a lawyer, qualified legal executive or representative of a trustee corporation, who will also provide legal advice before certifying the form.

The forms provide options available to the Donor and outline the responsibilities of the Attorney(s).

Further changes under the new rules are summarised below:

If two people appoint each other as Attorney, the same person can witness the respective Donor’s signature where there is no more than a negligible risk of a conflict of interest. Witnesses must ensure that the Donor understands the nature of the EPA, the potential risks and consequences and the Donor does not act under undue pressure or duress. Further, witnesses can use the standard explanation to discuss the implications and effects to the Donor of the EPA;

Attorneys must consult all other appointed Attorneys (not including successor Attorneys) when exercising their powers; and

A medical certificate required to determine whether the Donor is mentally incapable no longer needs to be in the prescribed form. From 16 March 2017, medical practitioners can use their own form of medical certificates provided they include the prescribed information from the relevant regulations. Previously issued certificates are still valid and do not need to be replaced – but can be if desired.

Transition provisions

Any EPAs executed by the Donor and Attorney under the old provisions still remain valid; however, EPAs signed by the Donor on or prior to 16 March 2017 but not by the Attorney will need to be re-executed under the new provisions.

If an EPA signed after March 2017 revokes an earlier EPA where the powers of the Attorney are the same but the Attorneys appointed are different under each EPA, notice must be given to the previously appointed Attorney before the new EPA can have effect. Notice may be given by the Donor’s lawyer or an Attorney under the new EPA if the Donor is mentally incapable.

Summary

These changes are driven to simplify the process and reduce time and money invested in obtaining an EPA. The forms, standard explanations and frequently asked questions are available on the Government’s SuperSeniors website:

http://superseniors.msd.govt.nz/finance-planning/enduring-power-of-attorney/