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What it means to make decisions when appointed under an Enduring Power of Attorney
Being asked to be an attorney, and making decisions about a person’s care, property, and finances, comes with many weighty responsibilities.
Often people are not fully aware of their obligations, and for some the role of being an attorney may be sprung on them suddenly because of an accident.
An Enduring Power of Attorney (EPA) is a legal document which sets out who can take care of a person’s care and welfare, or financial matters, if they are unable to for a temporary period or permanently.
In New Zealand, an attorney appointed by a donor under an EPA has important obligations to meet which are governed by the Protection of Personal and Property Rights Act 1988 (PPPR Act).
These obligations are designed to ensure that attorneys fulfil their role responsibly and in accordance with the principles of autonomy, dignity, and respect for the donor's rights.
The following guide outlines an attorney’s duties and is designed to help navigate any challenging and difficult decisions.
Roles and responsibilities
Primarily, an attorney must act in the best interests of the donor. This includes managing the donor's property, finances, and personal care and welfare according to the donor’s wishes. The management of their affairs may also need to take the donor’s known values, beliefs, and cultural background into consideration.
Acting with fairness, honesty, integrity, and diligence are essential. They must always prioritise the donor's well-being and their preferred way of doing things if these are known by the attorney.
Additionally, an attorney must exercise reasonable care and avoid any conflict of interest with the donor.
Consultation and communication
An attorney must consult with the donor even if they no longer have capacity. For example, if a donor is mentally incapable the hope is that they will recover, so the attorney must always be talking to the donor about what they are doing. However, ultimately the decision will be the attorney’s.
If the donor has lost capacity, the onus is on the attorney to encourage the donor to become self-reliant once again and hopefully get to a point where they can manage their own affairs.
The attorney can consult with other people, or provide information to others, to assist them with the management of the donor’s affairs and if the EPA provides for it then the attorney must consult with or provide information to the person or people named in the EPA. In this instance it is important for the attorney to understand the terms of the EPA and what the donor’s wishes were.
Record keeping key
An attorney must keep accurate records of their decisions and transactions in relation to a donor’s property to ensure transparency and protection for both them and the donor.
Those transactions can range in complexity, from selling a donor’s house or managing investments, through to more everyday tasks such as overseeing bank accounts, paying utility bills, and paying for groceries.
Private and confidential
Attorneys must keep the donor's affairs confidential and cannot disclose any information without proper authorisation, except as required by law or to protect the donor's interests.
Making decisions
If a donor’s EPA names other people who have the right to receive relevant information it must be provided when they ask for it. Alternatively, if the EPA requires a specific person to be consulted on decisions, the attorney must consult with that person prior to making a decision, however the ultimate decision remains with the attorney.
An attorney for a donor’s personal care and welfare must also consider the financial implications of their decisions. If there is a case where the attorney for a person’s property is different, then they must also be consulted regarding the financial implications. Sorry, I would love to help but …
If an attorney decides they are unwilling or unable to act they can disclaim their power by written notice to the donor. However, if the donor is mentally incapable then notice of an attorney’s intention to disclaim their power must be filed with the Court.
Trust and business interests
An EPA only relates to the donor’s personal assets. An attorney acting under an EPA cannot manage trust assets if the donor is a trustee of a trust. It also cannot be used to manage the company’s assets if a donor is a director of a company.
Other key points
An attorney cannot use the donor’s property to benefit themselves or any other person, or recover expenses from a donor’s property, unless the EPA states that they can or the Court allows it.
If an attorney is uncertain about what actions to take in the donor’s best interests, they can apply to the Court for directions. An attorney might want to do this if, for example, they’re having some difficulty carrying out some of a donor’s instructions.
Conversely, if an attorney’s actions are called into question, the Court has a wide discretion and may review any decision made by an attorney and/or make any order it thinks fit. This includes the power to revoke the appointment of the attorney if the Court is satisfied that the attorney is not acting in the best interest of the donor or is failing to comply with the obligation to consult with or provide information to other persons.
An attorney’s power to act automatically ceases if the donor dies meaning they no longer act in relation to the donor’s financial affairs.
If you have been appointed an attorney and have questions about your obligations, or have concerns about the actions of a person acting as an attorney, please contact Sayuree Ram on @email or 09 985 2526 OR Genevieve Kaye on @email or 09 985 2527 from the Trusts and Estates team.