Elder Law, Capacity and Enduring Powers of Attorney
As more New Zealanders experience age-related cognitive decline or sudden changes in health, families are increasingly required to navigate complex decisions about care, finances, and legal authority.
One of the most serious and growing risks facing older New Zealanders is financial elder abuse. Unfortunately, this often occurs within trusted relationships and can remain hidden for long periods. Financial elder abuse involves the illegal or improper use of an older person’s money, property, or assets for someone else’s benefit.
Protecting vulnerable relatives has never been more important, and early planning is key.
Enduring Powers of Attorney – a vital safeguard
An Enduring Power of Attorney (EPA) is one of the strongest legal protections an older person can put in place. An EPA allows you to choose someone you trust (your attorney) to make decisions on your behalf.
EPAs can cover:
- Property – financial and asset-related decisions
- Personal Care and Welfare – decisions about health, care, and living arrangements
Having a properly prepared EPA in place:
- reduces stress for family members
- ensures decisions can be made quickly
- protects finances and assets
- provides clarity around health and care decisions
- reduces the risk of conflict
- allows flexibility and personalisation
- provides peace of mind for everyone involved
Timing matters
An EPA must be signed while the person still has mental capacity. Unfortunately, many people wait too long, only to discover they no longer have the legal ability to put one in place.
Establishing an EPA well in advance significantly reduces the risk of financial exploitation by placing decision-making authority in the hands of trusted, pre-chosen individuals, within a legal framework governed by the Protection of Personal and Property Rights Act 1988 (PPPR Act).
When is an EPA activated?
A person making a Property EPA has the option for it to take effect immediately , or only once mental capacity is lost. If activation is capacity-based, a medical certificate is required.
A Personal Care and Welfare EPA only becomes active when the person is mentally incapable.
Common signs that may mean it’s time to arrange a capacity assessment:
- Trouble Understanding Information
- Memory Problems Affecting Daily Life
- Difficulty Communicating Decisions
- Poor Judgement or Trouble Weighing Up Options
- Confusion About People, Places, or Events
- Changes in Behavior or Personality
- Being Easily Influenced
- Difficulty Managing Daily Tasks
- Recent Health Issues Affecting Thinking
- Concerns Raised by Others
If several of these signs are present, it may be time to arrange a medical capacity assessment. This assessment helps ensure any EPA is activated fairly, correctly, and at the right time.
How to activate an EPA:
- Arrange a medical assessment – A qualified health practitioner (such as your GP or a specialist) assesses your ability to make decisions. When Determining mental Incapacity the relevant health practitioner must certify that the person can no longer understand, appreciate consequences, or communicate decisions.
- A Certificate of mental incapacity is issued – If the practitioner determines you are mentally incapable in the relevant area (property or personal care), they provide a written certificate and the EPA is activated.
- The Attorney begins making decisions – Your attorney must always act in your best interests and encourage you to develop your own competence to act on your own behalf as much as possible. They must keep all records and follow any instructions or restrictions in your EPA, including and consulting with anyone (where practicable) you have named in the EPA before making decisions.
You can also suspend or revoke the EPA (or the individual appointments of the attorneys) at any time provided you have capacity to do so.
What if there is no EPA?
When no EPA is in place, the PPPR Act provides a legal pathway for decision-making through the Family Court. The Court may appoint a Welfare Guardian or Property Manager, with ongoing oversight to protect the individual’s interests.
With PPPR applications doubling over the past decade, the Act plays an essential role in protecting vulnerable adults, resolving family disputes, and ensuring important decisions are made lawfully and safely.
The PPPR Act remains essential — but it is designed as a last resort, not the first choice.
Having an EPA in place is always the better option.
For further advice, please contact a member of our private client team.
Special thanks to Partner Dene Gavin and Registered Legal Executive Kirsty Peat for preparing this article.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.
