Dementia

Frequently asked questions

Answers to common questions about dementia, Enduring Powers of Attorney, including their purpose, activation, and legal considerations.

What is an Enduring Power of Attorney and what is the difference between an Enduring Power of Attorney for Property and for Personal Care and welfare?

Enduring Powers of Attorney ("EPA") are legal documents that allow you to nominate an individual or individuals to look after your money, property, your care and so on if you become "mentally incapable". The person who gives an EPA is referred to as the "Donor". The person(s) nominated by the Donor to manage its affairs as known as the "Attorney(s)". Any Attorney nominated must be over the age of 20 and have mental capacity.

Critically, you must arrange an EPA before you become mentally incapable. Contrary to common belief, your spouse does not automatically have the ability to deal with your affairs. There are two types of EPAs.

An EPA for Property gives the Attorney the right to manage your financial affairs and deal with your property, investments, bills and so on.

An EPA for Personal Care and Welfare allows for your Attorney to make decisions in regards of your health and welfare. This concerns questions such as where you are to live or who can care for you as well as to promote and protect your best interest in general.

In both cases you can authorise an Attorney to act in respect of all your affairs or only some of them. Granting an EPA gives considerable power over your property affairs or personal care and welfare to your nominated Attorney, therefore you need to trust your Attorney implicitly. Notwithstanding this, your property Attorney's paramount consideration under PPPR Act is to use your property to promote and protect your best interests, while your care and welfare Attorney's paramount consideration is to protect your welfare and interest.

We have current and valid Enduring Powers of Attorney in place but have been told they have to be activated. What does this mean and how do we activate them?

An EPA for Property can be effective immediately or become effective once the Donor loses mental capacity. An EPA for Personal Care and Welfare can only become effective once the Donor loses mental capacity. The "activation" process is reference to an assessment that confirms the Donor has lost mental capacity and the EPA is therefore effective. To activate an EPA a health practitioner's certificate is required which must contain the information prescribed in section 5 Protection of Personal and Property Rights (Enduring Powers of Attorney Forms and Prescribed Information) Regulations 2008.

You can find a standard form of certificate by following this link: pppr-act-competency-forms.pdf (baynavigator.health.nz)*.

Once the certificate is completed, it should be provided to the lawyer holding the relevant EPA documents who will note that they have been activated. Both the EPAs and the certificate should be provided to third parties, such as the bank, when the EPA is being relied upon.

Activation is not required for property where the Donor has selected for the appointment of the Attorney to be effective immediately.

Are there any restriction on who you can appoint as your Attorney?

Any Attorney:
1. must be 20 years of age or older;
2. have mental capacity; and
3. must not be an undischarged bankrupt.

Your attorney can be anyone you trust to understand and respect your wishes and feelings and who is able to manage your property. This can be a friend or family member, a work colleague, or a professional person, for example, a lawyer or an accountant.

What are my obligations as an Attorney and what decisions can I (and can't I) make?

As an Attorney your obligation is to properly promote and protect the best interests of the Donor.
You will need to:
1. Keep records of any decisions and actions you take;
2. Consult the Donor and encourage the Donor to make and communicate decisions;
3. Consult the relevant individuals named in any EPA document;
4. Provide relevant information to those individuals named in any EPA document.

There are also restrictions on what can and cannot be actioned under an EPA. An EPA for Property allows you to have decision making power to: sell property, access bank accounts, manage investments, pay bills, manage any businesses owned by the Donor and manage any benefit or pension the Donor receives from Work and Income. If the Donor authorised you to make celebratory gifts or donations, you must consider whether the Donor can afford to make them, having regard to the overall financial circumstances and commitments.
An Attorney cannot:
1. Take actions to benefit yourself or anyone else other than the Donor;
2. Recover expenses from the Donor's property;
3. Continue your role if you are bankrupt or if you are deemed as mentally incapable.

Under an EPA for Personal Care & Welfare you have the power to make decisions relating to where the Donor lives, who will look after the Donor, what activities the Donor participates in and also decision relating to medical care.
An Attorney cannot:
1. Make decisions about getting married, separate, divorced or adoption of the Donor's children;
2. Consent to surgery or treatment of the Donor's brain, including electro-convulsive treatment (ECT) for the purposes of changing behaviour;
3. Refuse consent to standard medical treatment that could save the Donor's life or allow the Donor to take part in any medical experiment, unless it might save their life or prevent serious damage to health;

It is important to note your attorney cannot refuse CPR if you need it, if you decide that you do not want to be resuscitated, you need to make an Advance Directive before you become mentally incapable.

The Donor also has the ability to add restrictions and conditions into the EPA which must also be followed by the Attorney.

What are the pros and cons of using a lawyer to draft Enduring Powers of Attorney instead of the Public Trust?

When using a lawyer to draft an EPA you are hiring a legal professional, who can provide guidance in relation to other legal issues effecting you such as relationship property or other estate matters. You can be certain that your will is valid, fit for purpose and ensure any risk of challenge are minimised. You can also appoint the lawyer as the executor to distribute your estate if you cannot name any suitable family members or close friends.

When using the Public Trust you are hiring a specialist in Wills and EPAs. However, they may not be a qualified lawyer. The Public Trust services are streamlined for efficiency but often do not take into account the specific circumstances of the client or their family situation particularly with large or complex estates or family dynamics and may not be fit for purpose.

In both cases, your estate will pay executor fees if you appoint a professional as the executor. While the Public Trust may provide a cost-effective solution for simple wills, using the Public Trust may potentially create higher fees overall, for example, high estate administration fees. This has been the subject of numerous complaints which have recently been in the media.

The Young Onset Dementia Assistance Package offered by McVeagh Fleming is at a lower rate that the public trust offers* and will be drafted and witnessed by a qualified solicitor having regard to your personal circumstances.

When should a geriatrician be used to certify mental capacity or incapacity and when is a certificate from a GP sufficient?

A Donor may specify in an EPA that the assessment of their mental capacity is to be undertaken by a health practitioner with a specified scope of practice, but only if the scope of practice specified includes the assessment of a person's mental capacity. Therefore, if a Donor specifies a geriatrician or a neurologist to be used for assessment, this will need to be followed.

Unless specified otherwise, a GP can be used to issue a certificate of mental incapacity, as long as the GP's scope of practice enables him or her to assess a person's mental capacity and the GP is competent to undertake an assessment of that kind.

We always recommend use of a geriatrician in any circumstance where capacity or decisions made by the Attorney may be challenged by other family members.

When does my power to act as an attorney end?

You may cancel your EPA provided you are still mentally competent to do so. Revocation of an EPA must be done in writing by notice of cancellation to your named attorney(s). Until an Attorney is notified they may continue acting on your behalf. You may also suspend your EPA by written notice to your Attorney(s).

An EPA can also be cancelled by your Attorney, if an Attorney states in writing that they no longer wish to act as an attorney or if your Attorney dies, loses mental capacity or goes bankrupt.

The Family Court must cancel an EPA if the judge believes that you were pressured into appointing your Attorney by unfair influence or fraud or that the Attorney is not suitable for the role, for example, due to their relationship with you.

The Family Court can, but does not have to, cancel your Attorney's appointment if the judge agrees that what your Attorney doing is not in your best interests or they have not consulted or given information to the named individuals under the EPA. The Court can appoint a property manager or welfare guardian whose authority takes priority over the Attorney, however, this can only be done if an application is made by a relative or authorised person.

Last, an EPA ceases to have effect upon your death. After your death authority to manage your estate passes to the executor named in your Will. If you do not have a Will the Court can appoint an administrator, however this can be a lengthy and expensive process.

What if someone has lost mental capacity and they do not have Enduring Powers of Attorney in Place?

If you do not have an EPA in place and you lose mental capacity then, in order for welfare or property related decisions to be made on your behalf, applications to the Family Court will need to be made. The person who lacks capacity will be referred to as the “Subject Person” throughout Court proceedings. These applications are filed under the Protection of Personal and Property Rights Act 1988 ("PPPR Act"). These applications can be filed urgently in certain circumstances, however, generally take several months to be granted and can be an expensive especially where application is contested.

Doctors can make decisions on your behalf in medical emergencies. In such a situation, doctors will, generally, consult with family. However, the family’s decision is not binding on the doctor’s decision making.

Welfare Guardian & Property Manager
A “welfare guardian” is a Court appointed decision maker for all “welfare” related decision, such as medical decisions and which residential care facility the Subject Person should live at. The “Property Manager” is the Court appointed decision maker responsible for managing the Subject person’s assets and liabilities and will be in charge of paying all of the bills associated with the Subject Person’s living expenditure. Generally, it makes logistical and financial sense to file both applications simultaneously.

Application Process
The threshold for applying to be appointed welfare guardian vs property manager differs. The granting of a Welfare Guardian Order requires the Subject Person to be “wholly lacking” capacity. Whilst a Property Manager Order allows the subject person to retain “partial” capacity. It is important to have medical advice to ascertain what level of capacity the subject person has retained.

After the application is filed, the Court will appoint a “Lawyer for Subject Person” (“L4SP”). L4SP will meet with the subject person, obtain their views on relevant matters where appropriate and report to the Court. The Judge will usually decide an application without the parties appearing in Court, however, if affected parties, such as family members, do not agree with the orders as sought, then they may oppose the application and a hearing may be required.

Other restrictions
Property managers and welfare guardians are not entitled to be paid for acting as such, however, all expenses that are reasonably incurred in exercising the powers are payable out of the property of the person, unless a Court orders otherwise.

Property managers and welfare guardians are not usually liable for their actions or decisions. However, there are two exceptions where they may be held liable: if it is shown that they acted in bad faith and without reasonable care or if they entered into a contract or arrangement or incurred a liability with a person without disclosing, they were acting on your behalf.

When an order appointing a property manager or a welfare guardian is made, the Court will also set a date by which time they must apply for a review of the order, this is generally in three years' time. If you do not apply for a review, the orders will expire.

Can I nominate an Attorney and/or Success Attorney if they do not reside in New Zealand? What if I have made an Enduring Power of Attorney under a different jurisdiction?

We recommend that any Attorney nominated resides in New Zealand for ease of contact although there is no legal obligation on this.

Having an Attorney reside outside of New Zealand means that decisions may not be made as expediently and there may be delays should an Attorney be required to sign a document on behalf of the Donor where audio-visual means are not permitted or available.

Given different countries have their different rules on EPAs, it is unlikely that an EPA made overseas would be recognised in New Zealand. Likewise, an EPA made in New Zealand is unlikely to be recognised abroad. We recommend that EPAs are in place in the various countries that you hold assets in so that if activated you have Attorneys who can manage your affairs.

Are there any other benefits in having Enduring Powers of Attorney put in place?

It is common for aged-care facilities to require its applicants to have up to date EPAs in place as a condition of entering a village. This requirement is place to give the facilities reassurance that its residents have decision-makers to act on their behalf if required.

It is also worth noting that aged-care facilities recommend that applicants have current wills in place before entering.

Am I eligible apply for a Residential Care Subsidy?

The residential care subsidy aims at aiding those who need financial support to obtain long term residential care in a hospital or rest home.

A needs assessment will be undertaken as part of the application process which is comprised of two parts; an asset assessment and an income assessment. We can provide further information if necessary but in the first instance we recommend you visit the following link is a helpful source for you to visit should you wish to make an application (Residential Care Subsidy - Work and Income).

Can I specify in my EPA for my Attorney to pursue assisted dying on my behalf?

From 7 November 2021, a terminally ill person gained the right to direct their doctor to end their life. There are strict criteria that an individual must meet before they are able to go through this process, which includes:
• Be aged 18 years and above;
• Suffer from a terminal illness that is assessed as likely to end their life within 6 months;
• Be in irreversible physical decline with unbearable suffering; and
• Be able to make this decision in an informed manner.

Unfortunately under the current criteria, assisted dying is not available to those with a dementia diagnosis.

In any event , assisted dying cannot be elected in advance meaning you cannot make provision for your Attorney to do so under your EPA. Making the decision to pursue assisted dying must be at the time which you have capacity and gone through the necessary consultations – if your EPA is in effect you obviously no longer have the capacity required under the legislation to make this decision.

*as at 26 August 2024.

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