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 EPAs 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, or if you become sick suddenly, 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 can relate to your personal care and welfare, and also to you property.  An EPA in relation to your property could also be important at any time while you are unavailable or incapacitated.  For example, a number of people who may be forced into isolation for an extended time due to Covid-19 may find an enduring power of attorney enables their family to manage their affairs while they aren’t able to.

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​

Disclaimer: While every effort has been made to ensure this article's accuracy, it does not constitute legal advice in any form. If you act on it, you do so at your own risk. We don't accept any liability for damage or loss, which may arise as a result of your reliance upon it.

An Enduring Power of Attorney (EPA) is a legal document. It enables you to appoint someone (i.e. the “attorney”) to make financial and care decisions on your behalf should you lack the capacity to make those decisions for yourself, 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 two which matter most:

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

Cost Guide

• EPAs cost around $300 to $500 to complete. Although you can get the documents at little or no cost (see below), they need to be signed in front of an “authorised witness” (usually a solicitor) who must advise the Donor and sign a certificate, which they will charge for.
• 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.

A Power of Attorney involves someone having temporary control of:
(a) all of your affairs; or
(b) only a specific issue(s).

A Power of Attorney has a specific date that it will start and end. It's most common when a person leaves New Zealand for a period of time and wants their property, including but not limited to bank accounts, real property and investments looked after by a specific person. A normal power of attorney ceases to have effect when you lose “mental capacity”.  An Enduring Power of Attorney looks after affairs when you lose “mental capacity”, which we define below. An Enduring Power of Attorney over property can also take effect while you have mental capacity, if you choose (which many do).

An attorney for your EPA could 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 care and welfare. It is rare for attorneys, known in New Zealand as lawyers, to be named in an EPA, unless they are being named in their personal capacity. For this reason, the word “attorney” must not be confused with what the legal document is providing.

There are two separate EPA documents that you can set up; one that covers your property affairs and one that covers your personal care and welfare decisions. You can prepare just one, or you can prepare both. You may like to pick one person to carry out both roles, or you may like to pick two different people that you think would be most appropriate to act on your behalf (although they will need to be able to work well together in that case). 

1. A Property EPA covers all of your property, including but not limited to bank accounts, real property and investments. This EPA allows your nominated person (or people) to use your property in your best interests. They are responsible for taking care of your finances, such as paying bills and managing investments, but also ensuring that your house is maintained and that any maintenance is taken care of. This EPA can come into effect before you lose mental capacity, for when things may become too difficult for you to manage on your own (or perhaps just away travelling). You can draft your EPA so that your nominated attorney must consult with you or others while you are mentally capable. You can choose one or more people to be your attorney for a Property EPA. For example, you may choose your spouse, partner and/or your son or daughter.
2. A Personal Care and Welfare EPA covers all of your health, accommodation and associated care decisions. It focuses on appointing someone to make decisions about your wellbeing, such as where you live and the care that you will receive. For example, the nominated person will consult with your doctor and make decisions that are in your best interests, which may include making the decision to move you into a secure unit of a rest home rather than stay at home on your own. The Personal Care and Welfare EPA only comes into effect when a medical professional or the Family Court has declared that you are “mentally incapable”. So that there is no conflict of opinion or difficulty with decision-making, you are only allowed to have one person act as your attorney for the Personal Care and Welfare EPA.

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.

A Property EPA can be activated when the person still had mental capacity - such a decision will be made by the donor.
For a Personal Care and Welfare EPA to come 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 attorney through an EPA, this person can now take over this role.
2. If there is no EPA in place, a welfare guardian or property manager may need to be appointed through the Family Courts.

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.

Next Steps: How to make an Enduring Power of Attorney
Once you've decided on who to choose as your attorney, you will choose how to draft the documents.  There are lots of options:

1. You can download and complete the forms yourself, for free, from the MSD website. But that is not an easy or recommended approach.  
2. Another alternative, and our suggestion, is an online provider such as LawHawk, who offer combinations of online wills and enduring powers of attorney. LawHawk is offering a package of a will and both EPA documents for $39.90, which is the cost of their will per our wills guide (so the EPA documents are effectively free). You may find an online solution, with its automation and guidance, faster and easier to complete your documents than using the MSD website.
3. Whether you use the MSD or an online service, you will still need to visit a local lawyer or a trustee corporation (like Public Trust) to arrange the signing and witnessing. 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. Because you need to see a lawyer or a trustee corporation anyway, if the total costs are acceptable, you may choose to ask them to do the whole thing for you. 

​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.