How to Set Up an Enduring Power of Attorney in New Zealand

Imagine this: you've had a stroke, and you can't make decisions about your medical care or finances. Your family wants to help, but without the right legal documents, they're stuck. They can't access your bank accounts to pay your bills. They can't sell assets to cover care costs. They'll need to apply to the Family Court for a property order, a process that takes months and costs thousands.

This is exactly what an Enduring Power of Attorney (EPA) prevents. It's one of the most important legal documents you'll ever sign, yet according to government estimates, fewer than half of New Zealanders over 50 have one in place.

Here's everything you need to know about setting up an EPA in New Zealand, including the step-by-step process, what it costs, and the critical decisions you'll need to make along the way.

An Enduring Power of Attorney is a legal document that appoints someone (called your attorney) to make decisions on your behalf if you become mentally incapable. Unlike a general power of attorney, which ends if you lose mental capacity, an EPA endures, continuing to work precisely when you need it most.

In New Zealand, there are two types of EPA:

• EPA for property: Covers financial and property matters like managing bank accounts, paying bills, selling assets, and handling investments
• EPA for personal care and welfare: Covers health, living arrangements, and day-to-day care decisions like medical treatment, where you live, and what support services you receive

You need both to cover all aspects of your life. Many people set up both documents at the same time, often appointing the same trusted person for both roles (though you can choose different people if you prefer).

The key distinction: your property EPA can be used while you're still mentally capable if you give permission, making it useful for things like having someone manage your affairs while you're overseas. Your personal care and welfare EPA only activates when you become mentally incapable.

Here's the catch-22 with EPAs: you must be mentally capable to create one, but you only need it when you're not mentally capable. That narrow window is why planning ahead matters so much.

Without an EPA, if you lose mental capacity through dementia, stroke, brain injury, or serious illness, your family faces significant hurdles. They'll need to apply to the Family Court for a property order (for financial matters) or a welfare guardianship order (for care decisions). This process typically takes 3-6 months, costs $3,000-$10,000 in legal fees, and involves court appearances and regular reporting requirements.

Meanwhile, bills go unpaid, investment decisions are frozen, and family members may need to cover expenses out of their own pockets while waiting for court authority.

An EPA set up in advance avoids all of this. Your chosen attorney can step in immediately when needed (or when you give permission for property matters), making decisions according to your known wishes without court involvement.

The best time to set up an EPA is during your 50s or early 60s, well before retirement. However, it's valuable at any age. Accidents and unexpected illnesses don't discriminate by age bracket.

This is your most important decision. Your attorney will have significant power over your life, so choose someone who:

• You trust completely with major financial and personal decisions
• Is organized, responsible, and good with money (for property EPA)
• Understands your values and wishes
• Will advocate for your best interests, even when it's difficult
• Lives in New Zealand or visits regularly (international attorneys can create practical difficulties)

Legal requirements for attorneys include being over 20 years old and mentally capable. For property EPAs, your attorney cannot be bankrupt or subject to a property order.

Common choices:

• Spouses or partners (most common, but consider who'll act if you're both incapacitated simultaneously)
• Adult children (often appointed jointly or as backups to each other)
• Siblings or close friends
• Professional trustees or lawyers (for complex estates or family conflicts)

You can appoint multiple attorneys to act jointly (they must agree on all decisions), severally (each can act independently), or jointly and severally (they can act together or separately). Joint appointments provide checks and balances but can slow decision-making. Separate appointments offer flexibility but require deep trust.

Always appoint at least one backup attorney in case your first choice is unable or unwilling to act when the time comes.

Your EPA can include specific instructions about how you want your attorney to act. While you can't cover every possible situation, you can provide guidance on important matters.

For property EPAs, factors to consider include:

• Whether your attorney can make gifts on your behalf (and any limits on amounts or recipients)
• Instructions about maintaining or selling your home
• How to manage investments or business interests
• Regular reporting to family members about financial decisions
• Whether to continue charitable giving you've been doing

For personal care and welfare EPAs, factors to consider include:

• Where you'd prefer to live if you can't stay in your own home
• Views on life-sustaining treatment in different scenarios
• Religious or cultural practices important to you
• People you do or don't want involved in your care
• Preferences about medical treatment approaches

Be thoughtful but not overly restrictive. Conditions that are too specific can prevent your attorney from responding appropriately to situations you didn't anticipate. The goal is providing helpful guidance, not tying their hands.

If you have strong views about end-of-life care, an advance directive (living will) can work alongside your EPA to document specific medical treatment wishes.

While EPA forms are available free from the government website, most people work with a lawyer to ensure everything is done correctly. A mistake in the document or witnessing process can invalidate the entire EPA.

The typical process includes:

• Initial consultation: Discuss your situation, family dynamics, and wishes with a lawyer (30-60 minutes)
• Document drafting: The lawyer prepares your EPA documents with your chosen attorneys, instructions, and conditions
• Review: You review the draft and request any changes
• Signing appointment: You sign the documents in front of a qualified witness

You'll need separate documents for your property EPA and your personal care and welfare EPA, though lawyers typically prepare them together as a package.

Costs vary but typically include:

• Lawyer's fees: $200-$500 for straightforward EPAs (both types)
• More complex situations with detailed instructions or business interests: $500-$800+
• Witnessing fees: $50-$150 (if not included in lawyer's fee)
• Some community law centers offer reduced fees for those on limited incomes

While this may seem expensive, it's a fraction of the cost of a Family Court application if you lose capacity without an EPA in place. Think of it as essential insurance for your future decision-making.

This is where many DIY EPAs go wrong. The witnessing requirements are strict, and failing to meet them invalidates the entire document.

For your EPA to be valid:

• You must sign it in the presence of a qualified witness
• Your witness must be a lawyer or someone else authorized to witness EPAs
• Your attorney must also sign, confirming they accept the appointment
• The attorney's signature must be witnessed by someone other than you

Your witness cannot be your attorney or a relative of your attorney. This independence requirement prevents conflicts of interest.

If you're using a lawyer to prepare your EPA, they'll typically witness it as part of their service. If you're using the government forms, you'll need to arrange witnessing separately.

The witness has an important role beyond just watching you sign. They must be satisfied that:

• You understand the nature and effect of the EPA
• You're making the decision freely, without pressure or undue influence
• You're mentally capable of making the decision

This safeguard helps protect against elder abuse and ensures EPAs are only created by people who genuinely understand what they're doing.

An EPA only works if people know about it and can access it when needed. After signing, take these steps:

Store the original safely:

• Keep it somewhere secure but accessible (fireproof safe, safety deposit box, or with your lawyer)
• Don't just tuck it in a drawer where it might be lost or damaged
• Remember that the original document is required for most financial institutions and government agencies

Give copies to key people:

• Your attorney (they need to know about their appointment)
• Your backup attorney
• Your doctor (especially for personal care and welfare EPA)
• Close family members who might be involved in your care
• Your lawyer

Tell people where the original is stored. If your attorney can't find the document when they need it, they're back to square one.

Keep a note with your important financial documents listing:

• Who your attorneys are and their contact details
• Where the original EPA is stored
• Any specific instructions or wishes you want followed

Some people include information about their EPA in their estate planning documents, though remember an EPA ends when you die (your will and estate plan then take over).

Life changes, and your EPA should change with it. You can revoke or update your EPA at any time while you're mentally capable.

Consider reviewing your EPA when:

• Your chosen attorney's circumstances change (they move overseas, develop health problems, or become estranged)
• Your relationship with your attorney changes (divorce, family conflict)
• Your financial situation becomes significantly more complex
• You acquire new assets or business interests
• Your views about care preferences change
• It's been more than 5-10 years since you set it up

To revoke an EPA, you must do so in writing and notify your attorney. If you're creating a new EPA to replace an old one, the new document should explicitly revoke the previous one.

Make EPA review part of your regular financial health checks. When you're reviewing your investment portfolio or retirement plans, take a moment to confirm your EPA still reflects your current wishes and circumstances.

"My spouse can automatically make decisions for me." Not true. Without an EPA, your spouse has no automatic legal authority to manage your property or make care decisions if you're mentally incapable. They'll need to apply to the Family Court like anyone else.

"An EPA means giving up control now." No. Your personal care and welfare EPA only activates when you become mentally incapable. Your property EPA can be set up to only activate then too, or you can give permission for it to be used earlier (useful if you want help managing affairs).

"I can create an EPA for my elderly parent." Unfortunately, no. The person creating the EPA must be mentally capable. If your parent already has dementia or significant cognitive impairment, it's too late for an EPA. You'll need to pursue a Family Court property order or welfare guardianship.

"Once I sign an EPA, I can't change it." Wrong. You can revoke or update your EPA anytime while you're mentally capable. It's not set in stone.

"My will covers this." Your will only takes effect after you die. An EPA covers the period when you're alive but unable to make decisions yourself. You need both documents for complete planning.

Important: This article is general information only and does not constitute personalised financial or legal advice. For advice tailored to your situation, speak with a licensed Financial Advice Provider or lawyer. You can find a registered adviser at fma.govt.nz.