Dementia already affects more than 50,000 people in New Zealand and is projected to affect more than 120,000 of us within 25 years. By law, relatives can't access your money even if it's to pay for essential care and treatment. Unless you have Enduring Power of Attorney (EPA) in place, your loved ones will need to apply through the Family Court to manage your affairs. This is always costly, time-consuming and stressful, so getting an EPA in advance is the best approach, and this guide explains how you do it.

You may be thinking "I don't need an EPA, I'm fit and healthy". Sadly, this is a common misunderstanding - you can ONLY set up an EPA when you have mental capacity. Once you've lost capacity, it's too late, and your loved ones are forced to deal with the Family Court to make any decision about caring for your needs. This is expensive, intrusive and stressful.

EPAs are not complicated, but we've put together a definitive guide to cover everything you need to know. This includes:

• What is Enduring Power of Attorney, and how much does it cost?
• Benefits of an Enduring Power of Attorney (and what to watch out for)
• What is mental capacity?
• How to make an Enduring Power of Attorney
• Enduring Power of Attorney Frequently Asked Questions​

Enduring Power of Attorney (EPA) is a legal document. It enables you to appoint someone (i.e. the “attorney”) to make financial and wellbeing decisions on your behalf should you lack the capacity due to illness or injury. Such a situation may seem like a long way off, but not having an EPA in place when you need one is a costly and stressful experience.

In terms of legal terms, there are only two which matter:

1. Donor - the person making the EPA whose care and financial matters will be taken care of when it activates
2. Attorney - the person who is appointed to act in the donor's interests and make care and financial decisions for their benefit. This is often a trusted family member or friend.

Cost Guide

• EPAs cost around $300 to $500 to complete
  
• The benefits of having a trusted loved one or friend act as your attorney to manage your affairs greatly outweigh the upfront cost.
  
• However, selecting the right attorney who will ultimately make all the decisions for you is critically important.

Ordinary Power of Attorney involves someone having temporary control of:
   (a) all of your affairs or
   (b) only a specific issue(s).  
You'll specify the date it starts and ends. It's most common when a person leaves New Zealand for a period of time and wants their assets looked after (i.e. property) by a specific person. Enduring Power of Attorney looks after affairs when you lose “mental capacity”, which we define below.

An attorney for your EPA can be a loved one, friend or business associate. It will be someone who has your best interests at heart while having the experience and confidence to make decisions about your financial and personal affairs. It is rare for attorneys, known in New Zealand as lawyers, to be named in an EPA. For this reason, the word “attorney” must not be confused with what the legal document is providing.

Every day we make decisions about our lives - the ability we have to make these decisions is called mental capacity. Those most vulnerable often lack mental capacity - for example, those with dementia, a brain injury, or suffering the effects of a stroke.

Before an EPA comes into effect, the donor must lack the capacity to manage his or her affairs. Only medical professionals can determine if the person with the EPA is mentally incapable.

For a Personal Care and Welfare EPA, the donor becomes mentally incapable if they are:

1. Unable to make decisions about their care and welfare, or
2. Unable to understand those decisions, or
3. Unable to know those consequences of those decisions; or
4. Unable to communicate decisions that they make about their care and welfare.

For a Property EPA, the donor becomes mentally incapable if they are unable to manage their property affairs.

In both assessments, it is assumed that the donor can make, understand and communicate decisions about their property and their care and welfare unless it’s proved otherwise. Importantly, the donor is not presumed to be ‘mentally incapable’ just because someone has arranged for their mental capacity to be assessed.

How is the assessment made?
The Hawkes Bay District Health Board has published a useful guide which outlines what questions a medical practitioner will ask, and what they will look for in their assessment. This can include asking about living arrangements, support requirements, assessing appropriate dress and personal hygiene, testing decision-making skills and processes, as well as assessing the potential risks to the patient, for example, malnutrition, injuries, and medication errors.
Once the medical professional is satisfied the patient doesn't have mental capacity, the following happens:

1. If the patient has already appointed an EPOA, this person can now take over this role.
2. If the patient is not capable of appointing an EPOA, a welfare guardian or property manager may need to be appointed through the family courts.

1. The first step is to think about who you would like to act as your attorney, and what you want them to do for you. The most common people to consider include your spouse, partner and children. Some people also select their parents.
2. Once you've decided on your attorney, you will need to visit a lawyer or a trustee corporation (like Public Trust). It is their job to make sure you understand what the EPA means, what it will do, and the responsibilities of your appointed attorney. The legal professional will also make sure it is valid under the law so it can be used if and when it's needed.

Warning: Make sure you are comfortable with your choice of attorney. In some instances, a person volunteers because it means they will have access to the donor's money. Make sure your family is comfortable with the choice to avoid problems later on.