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With New Zealand’s ageing population, the courts are becoming concerned about the next generation of New Zealanders, as cases like dementia continue to rise. With more people facing a potential loss of decision-making capacity, the courts are growing concerned about whether adequate legal protections are in place to safeguard individuals’ personal, medical, and financial wellbeing. As a result, setting up an Enduring Power of Attorney (EPA) is becoming more important than ever.
Despite this, only around one in six people currently has an EPA in place. This is particularly concerning given there is a steady increase in dementia rates, a trend expected to continue. Over the next 25 years, about $1.6 trillion in wealth is expected to be passed down, increasing the importance of having both a will and an EPA in place.
An EPA allows individuals to appoint trusted people to act on their behalf if they become unable to make decisions themselves. In New Zealand, there are two types: one covering personal care and welfare (including medical treatment and living arrangements), and another covering property (including finances, assets, and bill payments). By setting these up in advance, individuals retain control over who will act for them and how decisions should be made.
A common misconception is that family members can automatically step in when a loved one loses capacity. In reality, this is not the case. Without an EPA, relatives must apply to the court to be appointed as welfare guardians or property managers. This process can be complex, time-consuming, and costly, often adding stress during an already difficult period.
Timing is critical. An EPA can only be created while a person still has the mental capacity to understand its nature and consequences. Once that capacity is lost, the opportunity is gone, leaving the courts as the only option for appointing decision-makers.
The financial implications are also significant. Court appointed arrangements involve ongoing oversight, compliance requirements, and professional fees, all of which have been rising. These costs can quickly add up, placing further strain on families and the broader legal system. By comparison, establishing an EPA is a relatively straightforward and cost-effective step that can prevent much larger expenses down the line.
Having an EPA in place also provides clarity for family members, reduces the risk of disputes, and ensures decisions are made in line with the individual’s wishes. It can also prevent delays in urgent situations where timely medical or financial decisions are required.
As dementia rates continue to rise, the courts are likely to face increasing pressure from applications to appoint welfare guardians and property managers. Encouraging more people to put EPAs in place early could help ease this burden while better protecting individuals and their families. This pressure highlights that EPAs are not only a personal safeguard, but also a practical solution to reduce strain on the legal system and ensure support is available for those who need it most.
Planning ahead may not always seem necessary, but it is a practical and meaningful step. Putting an EPA in place ensures that, if the unexpected happens, decisions will be made by the right people, in the right way. This can help ease pressure on the courts and reduce financial strain for families. Seeking advice from a legal professional can help ensure everything is properly arranged and reflects your wishes.
With New Zealand’s ageing population, the courts are becoming concerned about the next generation of New Zealanders, as cases like dementia continue to rise. With more people facing a potential loss of decision-making capacity, the courts are growing concerned about whether adequate legal protections are in place to safeguard individuals’ personal, medical, and financial wellbeing. As a result, setting up an Enduring Power of Attorney (EPA) is becoming more important than ever.
Despite this, only around one in six people currently has an EPA in place. This is particularly concerning given there is a steady increase in dementia rates, a trend expected to continue. Over the next 25 years, about $1.6 trillion in wealth is expected to be passed down, increasing the importance of having both a will and an EPA in place.
An EPA allows individuals to appoint trusted people to act on their behalf if they become unable to make decisions themselves. In New Zealand, there are two types: one covering personal care and welfare (including medical treatment and living arrangements), and another covering property (including finances, assets, and bill payments). By setting these up in advance, individuals retain control over who will act for them and how decisions should be made.
A common misconception is that family members can automatically step in when a loved one loses capacity. In reality, this is not the case. Without an EPA, relatives must apply to the court to be appointed as welfare guardians or property managers. This process can be complex, time-consuming, and costly, often adding stress during an already difficult period.
Timing is critical. An EPA can only be created while a person still has the mental capacity to understand its nature and consequences. Once that capacity is lost, the opportunity is gone, leaving the courts as the only option for appointing decision-makers.
The financial implications are also significant. Court appointed arrangements involve ongoing oversight, compliance requirements, and professional fees, all of which have been rising. These costs can quickly add up, placing further strain on families and the broader legal system. By comparison, establishing an EPA is a relatively straightforward and cost-effective step that can prevent much larger expenses down the line.
Having an EPA in place also provides clarity for family members, reduces the risk of disputes, and ensures decisions are made in line with the individual’s wishes. It can also prevent delays in urgent situations where timely medical or financial decisions are required.
As dementia rates continue to rise, the courts are likely to face increasing pressure from applications to appoint welfare guardians and property managers. Encouraging more people to put EPAs in place early could help ease this burden while better protecting individuals and their families. This pressure highlights that EPAs are not only a personal safeguard, but also a practical solution to reduce strain on the legal system and ensure support is available for those who need it most.
Planning ahead may not always seem necessary, but it is a practical and meaningful step. Putting an EPA in place ensures that, if the unexpected happens, decisions will be made by the right people, in the right way. This can help ease pressure on the courts and reduce financial strain for families. Seeking advice from a legal professional can help ensure everything is properly arranged and reflects your wishes.
