In New Zealand, planning for the future includes making provisions for how your personal and financial affairs will be managed if you lose the capacity to make decisions for yourself. 

This is where an Enduring Power of Attorney (EPA) and the Protection of Personal and Property Rights Act (PPPRA) applications come into play. 

Both are essential legal tools that ensure your interests are protected, but they serve different purposes and are activated under different circumstances. 

This article explores the roles of EPAs and PPPRA applications, highlighting their importance and how they work. 

What is an Enduring Power of Attorney (EPA)? 

An Enduring Power of Attorney (EPA) is a legal document that allows you to appoint someone (known as your "attorney") to make decisions on your behalf if you become mentally incapacitated. There are two types of EPAs in New Zealand: 

• Property EPA: This authorises your attorney to manage your financial and property affairs. You can choose for this EPA to take effect either immediately or only if you lose mental capacity. The attorney's duties might include managing your bank accounts, paying bills, and making decisions regarding property investments. 

• Personal Care and Welfare EPA: This allows your attorney to make decisions about your personal care and welfare, such as medical treatment and living arrangements. However, this type of EPA only becomes active if you are declared mentally incapable by a medical professional. 

Why is an EPA Important? 

Establishing an EPA is crucial for ensuring that your affairs are managed according to your wishes if you can no longer make decisions for yourself. 

Without an EPA, your loved ones may face significant legal and financial hurdles to take control of your affairs, potentially leading to delays and decisions that might not align with your preferences. 

Additionally, an EPA can help avoid conflicts among family members by clearly specifying who has the authority to act on your behalf. 

The Protection of Personal and Property Rights Act (PPPRA) 

The Protection of Personal and Property Rights Act 1988 (PPPRA) is New Zealand’s legal framework for protecting individuals who are unable to manage their own affairs due to mental incapacity. 

If a person does not have an EPA in place and loses capacity, the PPPRA provides for the appointment of a welfare guardian or a property manager through a court application. 

PPPRA Applications: When and Why They Are Used

If someone becomes mentally incapacitated without having an EPA, concerned family members or other interested parties can apply to the Family Court under the PPPRA. 

The court may appoint: 

• Welfare Guardian: A welfare guardian is appointed to make decisions about the person’s personal care and welfare. This role is similar to that of a Personal Care and Welfare EPA, but it is granted by the court when there is no EPA in place. 

• Property Manager: A property manager is appointed to handle the financial and property matters of the person who has lost capacity. This role is similar to that of a Property EPA. 

PPPRA applications are typically more complex, time-consuming, and costly than setting up an EPA in advance. 

The court carefully considers these applications to ensure that the appointed person is suitable and that the decisions made will be in the best interests of the incapacitated individual. 

The Relationship Between EPA and PPPRA 

While both an EPA and PPPRA applications aim to protect individuals who can no longer manage their affairs, the key difference is that an EPA is set up by the individual themselves while they still have mental capacity, whereas PPPRA applications are made to the court after the individual has lost capacity. 

Having an EPA in place reduces the need for court intervention, allowing for a smoother transition of decision-making authority.  

Conclusion 

In New Zealand, planning for the possibility of losing mental capacity is an essential part of safeguarding your future. 

An Enduring Power of Attorney allows you to designate someone you trust to manage your affairs, while PPPRA applications serve as a safety net when no EPA is in place. 

By understanding and utilising these tools, you can ensure that your personal and financial matters are handled according to your wishes, providing peace of mind for both you and your loved ones.

Contact one of our offices to set up your EPA - Checketts McKay Law works for you.

FAQs 

• What happens if I don't have an EPA? If you don't have an EPA and lose mental capacity, your family or other interested parties will need to apply to the Family Court under the PPPRA, which can be a lengthy and costly process. 

• Can I have more than one attorney under an EPA? Yes, you can appoint more than one attorney, either to act jointly or separately. It's important to consider how multiple attorneys will work together.

• How do I revoke an EPA? As long as you have mental capacity, you can revoke an EPA at any time by notifying your attorney and destroying the original document.