What is a power of attorney?
When you give someone (or a company) power of attorney, you give them the legal right to act on your behalf in relation to one or more aspects of your life e.g. your finances, property, or healthcare.
There are two types of power of attorney:
1. Ordinary or general power of attorney: is where you give a person (or more than one person) the authority to act on your behalf in relation to either:
(a) all of your affairs or
(b) only a specific issue(s).
It can be for a fixed period of time or ongoing. If you lose your ability to make your own decisions (such as through illness or accident) then the ordinary power of attorney becomes invalid (is cancelled). An example of the kind of situation where you might give someone this kind of authority is if you were going overseas for a long time and wanted a trusted person to look after your finances until your return.
2. Enduring power of attorney: is created under the Protection of Personal and Property Rights Act 1988, and continues on even after you lose legal capacity (the ability to understand the nature and consequences of decisions and/or the ability to communicate these decisions).
For example, someone with an illness that will eventually affect their mental capacity, arranges for a family member to have enduring power of attorney so that they can make decisions on the sick person's behalf.
Choosing someone to give power of attorney to is a very important decision. Think carefully about who you want to choose as your attorney, as the role can be misunderstood or abused. The ideal attorney is someone you really trust, someone who will keep your best interests at heart and who cannot benefit financially from the decisions they may have to make.
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What are the two types of enduring power of attorney?
There are two types of enduring power of attorney:
- Enduring power of attorney for personal care and welfare: usually a close friend or family member (there can only be one at a time and it has to be an individual – not a trustee corporation) who makes decisions about your care e.g. selecting a rest home or deciding on medical treatment.
They can’t make decisions about marriage or divorce, refuse standard or life-saving medical treatment, or consent to medical experimentation. This kind of enduring power of attorney comes into effect only when you lose your mental capacity.
- Enduring power of attorney for property: you can pick one or more individuals or a trustee corporation to make decisions about how your property and finances should be managed. You can decide whether you want this to come into effect immediately or only when you lose your capacity.
It's possible to have one person who has enduring power of attorney for your personal care and welfare, and a different person who has enduring power of attorney for your property and finances.
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What should I look for when choosing to give someone power of attorney?
Whether they are to have ordinary power of attorney or enduring power of attorney, your attorney’s responsibilities are:
- To act in your best interests at all times and not abuse the trust you place in them
- To involve you in the decision-making as much as they can - they have to consult you about decisions, and you should try to make decisions as much as you can
Their specific responsibilities depend on whether they’ll have ordinary power of attorney or enduring power of attorney (and with the latter, what type of enduring power of attorney). You can require your attorney to consult with people named in your agreement, and you can specify people you don’t want to look after you.
When choosing an attorney, you should pick someone:
- whom you trust and who will act in your best interests
- at least 20 years old
- who is not bankrupt or subject to a personal or property order (for an enduring power of attorney)
- who understands their role as an attorney, and agrees to it
For enduring power of attorney, you may wish to choose different attorneys for personal care and for property as the two roles require different skills and criteria.
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How is 'loss of mental capacity' defined?
The meaning of this term varies depending on whether it’s do with an Enduring Power of Attorney (EPA) and what kind of EPA it is.
For an EPA for personal care and welfare, this means that the person is unable to make decisions about their personal care and welfare or understand decisions; they are unable to understand the consequences of those decisions (or of not making those decisions) and aren’t able to communicate their decisions to others.
For an EPA for property, it means that the person is mentally incapable of managing their property affairs.
The decision about whether a person is mentally incapable is made by a court or by a qualified health provider. Their mental capacity is assumed to be competent unless it is proved otherwise.
There is more information about this on the Community Law website.
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Do I have to go to a lawyer to set up a power of attorney?
If you are giving someone an ordinary power of attorney (see What is a power of attorney?), all you need to do is fill out the appropriate forms, have them signed by the attorney and yourself, and get both signatures witnessed (not necessarily by a lawyer). You can purchase an Ordinary power of attorney form from an online legal site or obtain one from a law office.
For an enduring power of attorney, you (the donor i.e. the person giving power of attorney) must receive legal advice from the person who will be your witness. The donor's witness can be:
- a lawyer, or
- a qualified legal executive, or
- an authorised officer or employee of a trustee corporation.
The attorney’s signature can be witnessed by anyone except:
- the donor and
- the donor’s witness.
The person who witnesses the donor’s signature must also be independent from the person who witnesses the attorney’s signature. The signatures must be witnessed by different people. For example, your lawyer can witness your signature but not the attorney’s, unless two people are appointing each other to be their attorney (e.g. between husband and wife). Also, if the attorney is a trustee corporation then a representative of the corporation can witness the donor’s signature.
You can get power of attorney forms from:
It’s a good idea to talk to your lawyer before you set up your power of attorney because they can tell you about:
- the information you need to fill out the form
- whether you should restrict your attorney’s powers to particular issues or types of decisions
- optional provisions such as;
- requiring your attorney to consult with people you choose
- requiring your attorney to provide information to people you choose
- appointing a replacement attorney if your first pick can’t act for you anymore
It’s worth asking around to get an idea of how much you’ll be charged for the legal advice and for drawing up the power of attorney for you (if you don’t want to do this part yourself). Fees are likely to vary widely depending on the provider.
You can find out more from the Community Law Centre website or the New Zealand Law Society factsheet.
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When does a power of attorney begin and end?
This depends on whether it's an ordinary power of attorney or an enduring power of attorney.
Ordinary power of attorney
When you fill out a form to give someone an ordinary power of attorney, you can specify when the power of attorney begins and ends. For example, you can specify that it begins on the date you leave New Zealand and ends on the expected date of your return.
An ordinary power of attorney is revoked (cancelled) automatically if you (the donor i.e. the person who is giving someone power of attorney) lose the mental capacity to make decisions, or die.
Enduring power of attorney
An enduring power of attorney for property can begin before or after you lose the mental capacity to make your own decisions (this is something you can specify when you set it up).
An enduring power of attorney for personal care and welfare can only begin when you lose the mental capacity to make your own decisions.
There are several ways for the EPA to end or be revoked:
- It is revoked automatically when you, the donor (the person who has given someone power of attorney), dies.
- The Family Court can revoke the appointment of an enduring power of attorney if it decides that the attorney is not acting in the donor’s (the person who gave power of attorney) best interests or failing to comply with their responsibilities. See the next question for more about this.
- If the attorney becomes bankrupt, loses their mental capacity or dies, they will lose their role of enduring power of attorney. Another one may be appointed in their place.
- The attorney may also decide they no longer wish to act as attorney, by giving notice of disclaimer.
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What can I do if I don’t agree with how the attorney is managing my mother’s financial affairs?
Your mother can cancel or revoke the power of attorney at any time while she is mentally capable. Because different procedures are needed depending on whether she is changing, cancelling or replacing a power of attorney, it’s a good idea for her to talk to her lawyer to get some advice about how to go about it.
If the attorney isn’t carrying out their responsibilities properly, you can apply to the Family Court to step in.
The people who can make a complaint to the Family Court about an attorney’s decision include:
- a relative
- another of your mother’s attorneys
- the manager of the hospital, rest home or residential care facility (if she is a patient of one)
- a medical practitioner
- a trustee corporation
- a welfare guardian that has been appointed to you
- an authorised person from an elder abuse and neglect prevention service, such as Age Concern
- any other person, with the leave of the court
The Family Court is able to do a number of things in relation to a person's attorney if necessary, such as:
- monitor an attorney's performance,
- change the terms of the attorney's role,
- give directions to an attorney to do certain things, or
- cancel an attorney's appointment.
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What can I do if my EPA attorneys are not getting on?
If you have two attorneys – one for personal care and one for property – then sometimes they can have different opinions about what is best for you and your life. Either attorney can apply to the Family Court to ask for direction about what to do.
How can I help someone who is already losing their mental capacity and doesn’t have an EPA?
If someone you care about won’t or can’t give someone enduring power of attorney, you can still protect them by applying to the Family Court for:
- a personal order. This is a court order which decides on a person’s mental capacity and, if the judge decides an order is necessary, requires that a particular action is taken to look after the person’s welfare. For example, a personal order can specify where the person should live or that they must receive medical advice or treatment.
- the appointment of a property manager. This is someone to manage the person’s property e.g. pay bills, arrange for repairs. A property order will specify what rights the property manager will have.
There’s more about this on the Family Justice website.