Duties under Enduring Power Of Attorney
This is a short series of articles looking briefly at enduring powers of attorney and the duties of the person that you appoint as your attorney.
Enduring Power Of Attorney (EPOAs) – What are they and how to do they work?
There are two forms of enduring power of attorney in New Zealand:
- the first appoints an attorney to act for you in relation to your property matters (including your financial affairs) (EPOA Property); and
- the second appoints an attorney to make decisions for you in relation to your personal care and welfare decisions (EPOA Personal Care).
Under an EPOA Property you can appoint one or more persons (or a company) and they can act either jointly or separately as your attorney. If you appoint two people to act jointly then every action and decision must be signed off by both of those people.However, if one of them dies the EPOA is invalidated and the surviving attorney cannot act unless you sign a new EPOA.
If you appoint people to act separately then your attorneys may act jointly or they can act individually. However, under an EPOA Personal Care you can only appoint one person to act as your attorney.
Under both forms of EPOA you are able to appoint successor attorneys so that if your first choice of attorney is unable to act or withdraws from the appointment then a successor is automatically appointed under the same document. We recommend that you include a successor attorney in your EPOAs wherever possible.
If you appoint different people as attorneys for your Property and for your Personal Care then the attorney that is appointed in relation to your Property must give the attorney that is appointed for your Personal Care any financial support required by that attorney to carry out his or her duties in relation to your Personal Care.
How mental capability impacts Power of Attorney
Under an EPOA Property you can authorise your attorney to act for you while you are still mentally capable and also if you become mentally incapable. Under an EPOA Personal Care your attorney can only act if you are mentally incapable.
To determine whether or not you are mentally incapable a certificate will need to be signed off by a health practitioner such as a doctor to confirm that you are no longer able to understand the nature of the decisions that you need to make or can no longer foresee the consequences of those decisions. If you are unable to communicate your decisions, you may also be considered mentally incapable.
You may revoke an EPOA at any time while you are still mentally capable by giving written notice to your attorney.
If you have been mentally incapable but return to being mentally capable then you may suspend the attorney’s authority to act under the EPOA by giving written notice to the attorney. While that suspension remains in force the attorney may not act under the EPOA until such time as a relevant health practitioner or the Court has determined that you are once again mentally incapable. A suspension does not revoke the EPOA it merely suspends the right of the attorney to act for you while you are mentally capable.
An EPOA ceases to be of any effect once you have died. At that point the executors under your Will would be empowered to act in relation to your property.
What duties do Attorneys have?
The duties of an attorney who has been appointed under an EPOA Property are:
- to use your property in the promotion and protection of your best interests while seeking at all times to encourage you to develop your competence to manage your own affairs in relation to your property;
- to keep records of each financial transaction entered into by the attorney while you are mentally incapable.
The duties of an attorney who has been appointed under an EPOA Personal Care are:
- to promote and protect your welfare and best interests while seeking at all times to encourage you to develop and exercise your capacity to understand the nature and foresee the consequences of decisions relating to your personal care and welfare and to communicate such decisions. The attorney must encourage you to act on your own behalf to the greatest extent possible and must seek to facilitate your integration into the community to the greatest extent possible. The attorney must also give consideration to the financial implications of any decisions the attorney makes in relation to your property.
Under both forms of EPOA the attorneys must as far as practicable:
- consult with you and with any other person specified in your EPOA;
- have regard to any advance directive given by you (i.e. a do not resuscitate instruction);
- must consult with any attorney appointed in relation to your property/personal care and welfare;
- provide information when requested to any person specified in the EPOA as being authorised to receive such information and to any solicitor appointed under the Act who is requesting records of financial transactions that the attorney must keep.
The decisions of your attorney may be reviewed by an application to the Court by yourself or any of your relatives, a social worker or medical practitioner, a trustee corporation or a welfare guardian appointed for you or the principal manager of any hospital care, rest home care or residential disability care provider to you or any other party that the Court consents to hear from.
An attorney may choose to disclaim the power under the EPOA while you are mentally capable by giving written notice to you. If you are mentally incapable the attorney can file a notice in the Court to disclaim the power and must indicate whether or not he or she thinks it is in your best interest that a welfare guardian or property manager be appointed instead. A Judge shall make that determination. The Court may revoke the appointment of an attorney if it is satisfied that the attorney is not acting or intends not to act in your best interests or has failed to meet any of his or her obligations or proposes to fail to meet any of his or her obligations.
An EPOA will also cease to have effect if the attorney dies or is adjudged bankrupt or otherwise becomes incapable of acting.
An attorney must not, while you are mentally incapable, act to benefit the attorney or anyone other than you or recover any expenses from your property unless either:
- you have specified a power for the attorney to so act in the EPOA; or
- the Court authorises the attorney to act that way; or
- the attorney’s actions relate to one of the following matters and the document creating the EPOA does not expressly prohibit this
(i) if the attorney is your spouse, or in a relationship with you and you are living together and sharing incomes, then property owned jointly and not as tenants in common may be utilised by the attorney;
(ii) Out of pocket expenses reasonable incurred; or
(iii) Professional fees and expenses reasonably incurred in relation to the attorney acting the EPOA;
(iv) Any loan or advance or other investment of your property that a trustee could make of trust funds under the Trustee Act 1956.
Guides to the law
Here are links to the New Zealand Law Society law awareness pamphlets.