Enduring Powers of Attorney
Enduring Powers Of Attorney
Under the Protection of Personal and Property Rights Act 1988 (the "Act"), it became possible to create Enduring Power of Attorney solutions. Prior to this Act, a power of attorney ceased to have effect if the donor became mentally incapable.
There are two types of enduring power of attorney:
The enduring power of attorney in relation to property authorises the attorney to act in relation to all or a specified part of your affairs relating to your property. You can give the enduring power of attorney subject to any conditions or restrictions you wish. Property dealt with under this type of enduring power of attorney can include not only land but all other property.
The enduring power of attorney in relation to personal care and welfare authorises the attorney to act in relation to your personal care and welfare, again either generally or in relation to specific matters and subject to any conditions or restrictions you may wish.
What can your Attorney do?
An enduring power of attorney in relation to property empowers the attorney to do anything which you can lawfully do. The attorney is your agent and can for example, handle your affairs while you are overseas.
However, an enduring power of attorney will not enable your Attorney to act in your capacity as an executor or trustee. If this is required, it will be necessary to execute a non-enduring power of attorney that specifically permits the Attorney to act in your capacity as executor and/or trustee.
An enduring power of attorney in relation to personal care and welfare authorises the attorney to act in relation to your personal care and welfare to the extent you specify. Any action taken by your attorney will have the same effect as if you had taken it.
Your personal care and welfare attorney may not:
There are two other major restrictions on the powers of your attorney. The Family Court may make orders on application from certain interested parties if it believes that a person is unable to look after their affairs without assistance. The orders may be personal or in relation to property and they prevail over the powers and duties of your attorney. A Court would be reluctant to make orders in circumstances where valid powers of attorney had been executed and there were not unusual circumstances.
Your attorney cannot use the power of attorney for his or her own benefit or for the benefit of other persons. The attorney can only do so if and to the extent that you might be expected to do so to provide for their needs or to make reasonable gifts, for example, on birthdays or to charities.
When does an Enduring Power of Attorney come into effect?
An enduring power of attorney in relation to property comes into effect upon execution and continues to have effect even if the donor becomes mentally incapable. However, you can specify that the enduring power of attorney will only come into effect if you become mentally incapable, should you prefer.
In relation to Enduring Power of Attorney solutions as to property, "mentally incapable" means that the Donor is not wholly competent to manage his or her own affairs in relation to his or her property.
An enduring power of attorney in relation to personal care and welfare only takes effect when a person becomes mentally incapable. For the purposes of personal care and welfare, mental incapacity means:
Signing of Enduring Power of Attorney
Any person who uses a form complying with the ones set out in the Act may create an enduring power of attorney. The enduring power of attorney must be signed by both the person creating the power of attorney (the donor) and the attorney. The donor's signature must be witnessed by a New Zealand lawyer with a current practicing certificate, or an experienced legal executive. The signature of those accepting appointment can be witnessed by an adult third party.
The Donor must be able to understand the nature and effect of signing an enduring power of attorney, even if he or she is mentally incapable at the time of signing in the full legal sense of being able to manage his or her property and personal affairs.
Who can be Attorneys?
Any person who is at least 20 years old, and who is not bankrupt or subject to an order under the Act (because that person is unable to look after his or her affairs without assistance) can be appointed as an attorney.
In the case of an enduring power of attorney in relation to property, it is also possible to appoint a statutory Trustee Corporation to act as attorney.
How many Attorneys are Permitted?
More than one attorney can be appointed in relation to property, but if you do decide to appoint more than one, it is recommended that you specify how the attorneys are to act, for example whether they are to act together at all times ("jointly"), or whether they can act either together or separately ("jointly or severally).
You can only appoint one attorney in relation to personal care and welfare. There are many similarities in the Act between welfare guardians (who are appointed by the Family Court) and personal care and welfare attorneys. A policy decision appears to have been made at the time of drafting the Act that only one welfare guardian should be able to be appointed, in order to encourage a relationship to be developed on a one-to-one basis with the aim of encouraging the incapacitated person to manage his or her own affairs. It is probable that the same rationale underlies the ability to appoint only one personal care and welfare attorney.
It is possible to appoint a successor to your nominated attorney in the event that the nominated attorney is unable to act, however it is not possible to delegate the power of appointment to your nominated attorney.
Cancellation or Revocation of Enduring Powers of Attorney
An enduring power of attorney ceases to have effect when:
If you appoint two or more attorneys in relation to property to act jointly but not separately, and one dies or becomes bankrupt or incapable of acting, the whole enduring power of attorney will cease to have effect.
Only the Family Court can determine whether or not a person who has made an enduring power of attorney is mentally incapable and therefore rule that the enduring power of attorney in relation to personal care and welfare has come into effect.
Can I make a enduring power of attorney myself?
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