As a population we are living longer than ever before and while longevity is fantastic if you are in good health, the reality for some people is that they may go through a period of poor health and may lose the ability to make decisions for themselves. 

An EPA is a legal document that sets out who can make decisions for you in relation to your health and financial matters if you can no longer make those decisions for yourself. 

Putting in place EPAs while you are capable of doing so is like taking out an insurance policy; it is something you need but hope you never use.

The Basics 

As the person entering into the EPA you are the ‘donor’, and the person you appoint is called your ‘attorney’. EPAs come under two categories, Property and Personal Care & Welfare. 

The Property attorney manages your financial matters and the Personal Care & Welfare attorney makes decisions about how and where you are cared for. 

Given the connected nature of our financial and welfare matters, donors often appoint the same attorney to both roles, but this is not a requirement. To ensure that our EPAs are drafted to stand the test of time, you can appoint back-up attorneys to act if your first attorney is unwilling or unable to act. There are also options to add duties on your attorney to consult and provide information to designated people. 

By way of an example, parents with a number of children may choose one or two adult children to act as their attorneys and those attorneys will have a duty to consult with and provide information to their siblings about how they are managing the parent’s affairs. 

This structure ensures that family members not appointed as an attorney still feel included in the process. 

EPAs are prepared in two separate documents and your signature, as the donor, will need to be witnessed by a solicitor who has explained the effects of the documents to you in person and is satisfied that you fully understand the effect of the EPAs. 

If there is any concern regarding the donor’s capacity a medical certificate may be required to confirm that the donor has capacity at the time of entering into the EPA. 

It is important to note that once an individual has lost capacity it is too late to enter into an EPA and a Court process will need to be followed (explained in more detail below) - when it comes to entering into EPAs it is better to be 10 years too early than one minute too late. 

Provided a person still has capacity, you can enter into an EPA at any time in your life after the age of 18, it is important to remember that EPAs could be required at any age and stage and they are not just for the later years of life.

The implications of not having an EPA

You might assume that if you lost mental capacity your family would be entitled to make decisions for you however without EPAs, that isn’t the reality. 

In the absence of an EPA your family would be faced with the prospect of applying to the Family Court for orders to be appointed as a Property Manager or Welfare Guardian, or in the case of a medical emergency a doctor will make a decision on behalf of the person

who has lost capacity.

In the event that someone has lost mental capacity and has not put EPAs in place a family member or trusted person must apply to the Family Court under the Protection of Personal and Property Rights Act 1988 for orders to be granted appointing someone as your Property Manager and Welfare Guardian. 

This may or may not be the person you would have chosen for yourself if you had appointed an attorney. The Family Court application can be costly and time consuming and, once granted, there are on-going obligations on the person appointed to provide regular reports to the Court and for their appointment to be reviewed in three years. 

In addition, Welfare Guardians and Property Managers are not paid for their roles, while reasonable expenses can be claimed from the incapacitated person’s estate there is a lot of time and energy involved in applying for this role and carrying it out, which they are not compensated for. 

To avoid the need for one of your loved ones to go through the process of applying to the Court for orders, the preferred approach would be to enter into EPAs now, while you are healthy and capable. 

Setting up your EPAs while you have capacity will ensure that a trusted person of your choice is appointed as your attorney and you will save your family the stress, time and cost of the Court process. 

Lastly, if you are considering moving into a retirement village (or similar living arrangement) in your later years you will find that retirement villages in New Zealand require all residents to have EPAs in place prior to moving in, this is to ensure that if a resident loses capacity there is a plan in place for who will make decisions regarding the resident’s property, care and welfare. 

When someone close to us loses capacity this will no doubt be a challenging time, and without EPAs in place there may be the added stress of applying to the Family Court for orders to be granted to appoint a Property Manager and Welfare Guardian. 

The simple task of setting up EPAs now while you are capable will eliminate any unnecessary stress and will ensure that your wishes are followed as you will have selected your attorney and the parameters of their duties. 

If you or someone in your family has found yourself in a situation where someone’s capacity is in question and they do not have EPAs, we are happy to help you navigate this process. 

Similarly, if you would like to futureproof your personal affairs now and establish EPAs we have lawyers in Alexandra, Ranfurly, and Cromwell who are happy to assist with the drafting and signing of these.  

You will find us under professional services on The Central App. Checketts McKay Law