New Zealand: Enduring Powers of Attorney - changes coming into force

Last Updated: 28 March 2017
Article by Laura Wood

Enduring Powers of Attorney (EPAs) are important documents where a person (donor) appoints representatives (attorney/s) to take care of their affairs if they lose mental capacity. There is a common misconception that only the elderly need to have EPAs but anyone can become mentally incapable at any age. In addition there is the ability for EPAs to take effect while a donor still has mental capacity.

There are two types of EPAs: one in relation to property and one in relation to personal care and welfare. The Protection of Personal and Property Rights Act 1988 (the Act) sets out the requirements for EPAs.

Amendments to the Act come into force on 16 March 2017. These include a change to plain language forms of EPAs so that they are simpler and easier to follow for donors and attorneys alike. From 16 March 2017, EPAs in the old forms that are not fully executed will need to be re-done on the new forms. Any EPAs in the old form that are fully executed before this date will still be effective.

The Changes

Mutual Appointments
The changes to the Act relax the witnessing requirements when it comes to mutual appointments provided there is "no more than a negligible risk of conflict". Previously, when two donors appointed each other as attorney (e.g. husband and wife), each EPA would need to be witnessed by a different person. This meant several lawyers needed to be involved in the witnessing process and added to the costs involved.

Witnessing Requirements
There is now greater responsibility on the witness and in the certification a witness must certify that they believe on reasonable grounds that the donor understands the nature of the EPA, the potential risks and consequences of the EPA and that they are not acting under undue pressure or duress.

Revocation
Donors now have the option to tick a box if they wish to revoke an earlier EPA (similar to the revocation clause in wills). If it is ticked, the donor's lawyer or new attorney can serve notice of revocation to the previous attorney. This is to avoid the situation where a person loses capacity with multiple EPAs giving power to different attorneys.

Donors can now elect to revoke the appointment of one or more of their attorneys by giving notice in writing, without revoking the entire EPA. The EPA would therefore only cease when the last remaining attorney had their appointment revoked. This means a new EPA does not need to be drafted if the donor only wishes to revoke the appointment of one person.

Duty to Consult
The attorney's duty to consult has been expanded. Previously, an attorney acting under an EPA was under a duty, as far as practicable, to consult with the donor and any person specified by the donor in the EPA in respect of the matters detailed in the EPA. Attorneys are now also required to also consult with any other EPA attorney of the donor (except a successive attorney whose appointment has not taken effect).

Medical Certificates
Up until now, medical certificates for incapacity have often been required. There was concern that such a specific requirement could cause unnecessary cost and delay in invoking EPAs. A medical certificate will now be acceptable if it contains the prescribed information which will be contained in the Regulations. The Medical Council has advised that all doctors should be competent to assess mental capacity.

The Forms

The forms will be available online and are in a tick-box format. It is intended that lawyers will be able to complete the forms online based on their clients' instructions and download them for printing and signing.

Although the forms will be available to the public and a donor could technically prepare their own EPAs, their signature must still be witnessed by a lawyer, registered legal executive or representative from a trustee corporation. To be effective the witness must be able to provide the relevant certificate confirming they have explained the document to the donor.

We recommend that anyone wishing to set up or renew their EPAs should consult with their lawyer first.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Laura Wood
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