Why
An Enduring Power of Attorney is a relatively simple and very cost-effective way of ensuring your interests are looked after by a person whom you trust should you become incapable or are absent, for example on a trip overseas.
If you have not appointed an Attorney and become incapable your next of kin and/or partner will likely have to go through the far longer and expensive process of obtaining an order from the Family Court to administer or deal with your property or personal care.
What
A person to whom you give a Power of Attorney will have the right to act on your behalf, including being able to sign bank documents and contracts.
A Power of Attorney may be Ordinary or Enduring. An Ordinary Power of Attorney only applies while you have the ability to make and communicate decisions. An Ordinary Power of Attorney will end if you lose mental capacity.
An Enduring Power of Attorney by contrast, will be effective even when you are unable to make decisions.
Additionally a Power of Attorney may be granted in relation to 2 distinct matters:
• Your Property
• Your Personal Care and Welfare (only triggered when mental capacity is lost)
How
You may select more than 1 person to be your Attorney(s) in relation to Property. For Personal Care and Welfare you may only choose 1 person.
Your Attorney needs to be at least 20 years old, must not be bankrupt and must have mental capacity.
A particular form is required to create the Power of Attorney. These forms are available from lawyers, the Public Trust and the Office for Senior Citizens.
It is not necessary, (but certainly wise), to instruct a lawyer to prepare a Power of Attorney for you. Your lawyer should advise you of the implications, powers and the number of options available so that you have a Power of Attorney which matches your intentions. Some of the options you may wish to have in your Power of Attorney include the time at which the Power of Attorney becomes effective, a duty on the Attorney to first consult specific people before making any decision and appointing another Attorney to succeed the first Attorney.
You should not hesitate to call your lawyer, legal executive or other advisor to discuss the merits of creating a Power of Attorney, especially if you are in the midst of a property or finance transaction.
Please note that a Power of Attorney does not replace a Will as a Will becomes effective upon death whereas the Power of Attorney can only be effective whilst you are alive.
This article has been written by Aman Prasad, Associate at Patel Nand Legal.
Feel free to contact him for your next home purchase on 09 522 2757 aman@patelnand.co.nz
