General News

POWERS OF ATTORNEY

A question was raised recently and this post provides clarification.  See articles 4.4 and 4.4.1 of your JP manual.

There are two types of Power of Attorneys allowed by law:

Ordinary– An Ordinary Power of Attorney is usually given for a specific time or task and is valid for as long as the donor is competent. A competent donor is capable of making their own decisions and not incapacitated. Incapacity means a person doesn’t have the physical and or mental ability to manage their affairs. If the donor becomes incapacitated, an Ordinary Power of Attorney is no longer valid.

An Ordinary Power of Attorney can start immediately or on a date of your choosing.

For example, suppose your employer asks you to go overseas on business for six months. In that case, you can execute an Ordinary Power of Attorney to allow a trusted friend to manage your home, business, and other affairs while you’re away. If you become incapacitated while you’re away, your attorney’s powers end.

Enduring– There are two types of Enduring Power of Attorney (EPA);

1. one that gives someone you trust the power to make decisions about your personal care and welfare (which only takes effect if and when you lose your mental capacity)

2. one that gives someone the power to make decisions about your property and financial affairs (which you can choose to take effect while you still have mental capacity)

As the name suggests both types of EPA remain valid until either they are revoked or the donor dies. In order to set up an EPA, the donor must be mentally competent. Generally, both types of EPA are set up at the same time.

For instance, if you have set up EPAs, and you become injured and unable to move about, your financial attorney can pay bills and manage your business affairs. If you become incapable for any reason during this time, an EPA will allow your appointed attorneys to manage both your personal care and your financial affairs.

Further information can be found on the NZ Law Society website (https://www.lawsociety.org.nz/for-the-public/common-legal-issues/powers-of-attorney/)