The Quashed Blog
What is an Enduring Power of Attorney?
21 June 2021
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With the pandemic still affecting most of the world right now, people are thinking ahead about their life and finances. One of the many thoughts you may have is how your finances and important decisions are managed if you unexpectedly become critically ill or injured. Ensuring that your wishes are clearly expressed and maintained is a task to be sorted out whilst in good health, often done through an Enduring Power of Attorney (EPA). If this weighs on your mind, we’ve summarised what an EPA is below, and provided some food for thought on whether you should get one.

What is an EPA?

An Enduring Power of Attorney (EPA) is a legal document created by yourself, where you as the ‘donor’ grant someone you appoint the authority to take care and make decisions regarding your finances or health. This trusted person is called your attorney, usually a family member, friend or trusted adviser. This is exercised when you are deemed no longer mentally capable of organising these matters yourself, such as through injury, illness or loss of mental competency. As a result, it allows important decisions regarding yourself and your property to be made by those you trust, which you may have given instructions to, instead of the court. Therefore, an EPA is similar to a will in that it is a pre-emptive measure that allows a trusted person to act on your behalf. However, it differs in that an EPA is enacted whilst you, the donor, are still alive and will cease when you pass. 

There are two distinct types of EPA, namely an EPA for personal care and welfare and an EPA for property. As the names suggest, an EPA for personal care grants the power to your appointed attorney to take charge of your ongoing healthcare as well as decisions regarding your general welfare. Examples of this would be decisions regarding your living conditions and arrangements, medical treatments or care persons. Similarly, an EPA for property grants your attorney power to manage your money and property, taking care of the financial aspects of your life. Examples of this include paying bills and debts, making purchases, and other transactions of your financial assets. These two different types of EPA have distinct and separate realms of authority, and you can choose to either appoint the same attorney for both or instead appoint separate attorneys for each. Note that you can have multiple attorneys stated for your property EPA, but only one attorney can be appointed for your personal care and welfare EPA. Furthermore, a personal care and welfare EPA can only take effect once you are mentally incapable, whereas a property EPA can take effect beforehand if stipulated.

The attorney/s you appoint can be anyone you trust, and should be someone that you truly believe has your best interests as their priority. Besides friends and family, it is also common to appoint colleagues, legal professionals or chartered accountants, and trustee companies. Further information regarding EPA’s and their surrounding context can be found at this frequently asked questions list hosted by the Ministry of Social Development.

Why would I need an EPA?

One of the biggest advantages of an EPA is that it gives you certainty in who will be responsible for your matters, and that you can feel reassured that your wishes are being respected. When you become mentally incapable, your partner does not automatically gain control over your financial assets and bank accounts, nor do they have the legal authority to make certain decisions regarding your health and wellbeing. If you do not have an EPA and are rendered mentally incapable, the family court will usually make decisions for you, or in most cases they will appoint someone responsible as your welfare guardian, a process you will obviously have no influence over. This process can be expensive, and there is also the issue of delays as well as the long time it could take for matters to be satisfactorily solved in the family court. These hassles and worries are eliminated by an EPA. 

On a more sombre note, an EPA is also a form of protection especially if you have a distressing family situation, safeguarding you from financial abuse or neglect. The court is not aware of the intricacies of your life, and an EPA prevents people in your life that do not value you from gaining control over your health and estate, such as family members you are on poor terms with. 

How do I get an EPA?

The process of creating an EPA first requires obtaining the official form, which can be found from legal professionals, trustee companies or from the MSD Super Seniors website. You will be appointing your attorney on this form, who will also need to be present at the signing of the document. You will then need to employ the service of a legal professional such as a lawyer or a trustee company to act as a witness to the signing of the document; both your signature and your appointed attorney’s signature needs to be witnessed. However, the same person cannot witness both your signatures, there instead needs to be an independent witness for your attorney’s signature. The legal professional who is acting as your witness is obligated to explain the consequences of the EPA and your rights, and is also required to attach a certificate to the EPA certifying its authenticity. They must also sign a certificate asserting their independence from your appointed attorney, which is a measure to ensure the process is wilful and not forced.

An important condition to creating an EPA is that you must be mentally capable, as evaluated and captured in the certificate signed by your witness. After the EPA is signed, for it to take effect, you must be evaluated by a medical professional to be medically incapable, and so on for every significant decision made on relevant matters.

Where can I find out more?

EPA’s are a lengthy and complicated process, and are one that you should endeavour to fully understand before signing. As always, it is best to seek legal advice beforehand, with separate advisers for both the donor and the attorney. There is a more comprehensive collection of information online at the Department of Justice and the official New Zealand government website, detailing the intricacies associated with EPA’s.

Insurance documents such as your income protection or trauma cover will come in handy for your attorney when they need to claim or make financial decisions on your behalf. Managing these documents for you and your attorney may seem to be a hassle but with Quashed, all your insurance documents are easily accessible in one place. Securely store and track all your policies, renewals and spending online. Take back control of your insurance for free with Quashed.

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