Attorney
The Attorney is obliged to act in the best interests of the Donor. They also have a duty to consult the Donor whenever possible, and to encourage the Donor to act for themselves.
In the case of a husband and wife, it may be appropriate for them to appoint each other in the first instance as their attorney and to appoint an adult child as their successor attorney.
There are two kinds of Enduring Power of Attorney: in respect of Care & Welfare, and in respect of Property. If different Attorneys are appointed for Care & Welfare and Property, then they have an obligation to consider each other when making decisions. The Property Attorney needs to provide funding for the Welfare decisions, and the Welfare Attorney should consider the financial impact of their decisions.
The Deed of EPOA can stipulate that certain people are to be consulted in any decisions regarding the Donor’s Property or Welfare. This is particularly useful if one child has been appointed as Attorney and the remaining children need to be kept advised of any decision making.
Attorney Rights and Obligations
The rights and obligations of an Attorney are governed by the Protection of Personal and Property Rights Act 1988 (“PPPR”), the PPPR Amendment Act 2007 and the Deeds of Enduring Power of Attorney themselves. An Attorney is required to:
Act in the best interests of the Donor, while encouraging the Donor to develop the Donor’s competence to manage the Donor’s own affairs in property and personal care and welfare decision making. The Court can revoke the appointment as Attorney for failure to act in the best interests of the Donor;
Encourage the Donor to understand the nature and foresee the consequences of decisions, and to communicate such decisions;
Facilitate integration into the Community;
Keep records of financial transactions as the property Attorney. Failure to do so is punishable by a fine not exceeding $1,000 for each separate offence; and
Must not act for the benefit of themselves or others unless authorised by the Court or the Enduring Power of Attorney document.
An Attorney is able to make investments, loans, advances under the Trustee Act 1956, and claim out of pocket expenses.
Once a Donor has become mentally incapable the Family Court has the power to review an Attorney’s decisions. There are a number of people who can request the Court to review an Attorney’s decisions, these people are:
Donor
Relative or another Attorney of the Donor
Social worker/Medical practitioner
Trustee Corporation
Manager of the hospital or rest home in which the Donor resides
Donor’s Welfare guardian
Elder abuse and neglect prevention service representative
Any other person with the Court’s permission
Suitability of Attorney
The Legal requirements are that an Attorney must be:
At least 20 years;
Not bankrupt
Not subject to a personal or property order under PPPR Act 1988.
For an EPOA in relation to Property, the Donor can appoint a Trustee Company, but for an EPOA in relation to Welfare, the Donor cannot appoint Trustee Company – i.e. they have to appoint a person.
Presumption of Competence
Under the Act all Donor’s are presumed competent until proven otherwise. There is no longer any provision for partial lack of capacity; a Donor must wholly lack capacity before the Attorney can exercise their powers.
Mental Incapacity – Proof Proof of mental incapacity is provided by medical certificate (prescribed) completed by a relevant health practitioner whose scope of practice includes assessment of a person’s mental capacity. The NZ Medical Council has confirmed GP’s and Psychiatrists qualify and has reserved its position, subject to legal opinion, as to what other health practitioners qualify.
For an Enduring Power of Attorney in Relation to Property – a medical certificate is required before the Attorney can begin exercising any powers, unless the Donor has chosen to put the Property EPOA in effect immediately in which case mental incapacity is not relevant.
For an Enduring Power of Attorney in Relation to Personal Care & Welfare – a medical certificate is required prior to making decisions on significant care & welfare matters; on other non-significant matters, mental incapacity is assessed by the Attorney based on reasonable grounds i.e. an evidence based assessment.
The Donor’s mental capacity must be determined afresh, and for each of the significant matters, medically certified. If there are any doubts regarding the Donor’s mental capacity, obtain the medical opinion.
The Attorney pays for the medical assessment and recovers the costs from the Donor.
Suspend or Revoke
Should the Donor lose but then subsequently regain mental capacity, they can suspend authority of the Attorney by written notice. The suspension does not terminate the Enduring Powers of Attorney and it can be re-activated if the Donor subsequently becomes mentally incapable again.
The Donor can also revoke the authority by written notice. A revocation terminates the Enduring Powers of Attorney.
If you need advice, give us a call 03 477 8080.