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Many people assume their family will automatically be able to make decisions for them if they lose mental capacity, but without Enduring Powers of Attorney (EPA) in place, that’s not the case. Without an EPA, your loved ones may face lengthy court processes, unexpected costs, and legal hurdles just to manage your medical care or finances—creating unnecessary stress during an already challenging time. Planning ahead by setting up an EPA ensures your wishes are followed and spares your family from legal battles.
If you lose mental capacity without an EPA, decisions regarding your personal welfare or property must go through the Family Court. These applications, filed under the Protection of Personal and Property Rights Act 1988 (PPPR Act), can be expedited in urgent cases but often take several months and can be costly, particularly if contested.
In cases of medical emergencies, doctors can make decisions on behalf of the person who has lost capacity. While they may consult with family members, the final decision rests with the medical professionals. Family input, although important, is not binding on the doctor’s decision-making process.
In the absence of an EPA, the Court can appoint a Welfare Guardian and/or Property Manager to handle the Subject Person’s affairs.
It is often practical to file for both appointments at the same time, given the interconnected nature of welfare and financial matters.
The criteria for appointing a Welfare Guardian differ from those for a Property Manager:
A medical professional’s input is crucial to determine the Subject Person’s level of capacity. After the application is submitted, the Court appoints a Lawyer for the Subject Person (L4SP) to meet with them and assess their views where possible. The L4SP reports back to the Court, and in most cases, the Judge will make a decision without requiring a hearing. However, if there is disagreement among family members or other affected parties, or if there are questions about the subject person’s level of capacity, a hearing may be needed.
Welfare Guardians and Property Managers are not paid for their roles, but any reasonable expenses incurred in carrying out their duties can be covered by the Subject Person’s estate, unless the Court orders otherwise.
While Welfare Guardians and Property Managers are generally protected from liability for their actions, exceptions exist. They can be held accountable if they act in bad faith or fail to exercise reasonable care. Additionally, they must clearly disclose their role when entering into any agreements on behalf of the Subject Person to avoid personal liability.
Once the Court has appointed a Welfare Guardian or Property Manager, the order is not indefinite. The Court sets a review date, typically within three years, to reassess the need for the appointment. If no review is requested by that time, the orders will expire.
The process of managing someone’s affairs after they lose mental capacity without an EPA in place can be complex and time-consuming. Establishing an EPA while you have capacity ensures that your wishes are respected, and loved ones are spared the stress and expense of a Court application. If you or a family member are in this situation, seeking expert legal advice early can help navigate this challenging process.
If you have questions about EPAs or need assistance with Court applications, contact our team for tailored legal support.
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Email: ffaithfull@mcveaghfleming.co.nz
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© McVeagh Fleming 2024
This article is published for general information purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice. If you require specific legal advice in respect of any legal issue, you should always engage a lawyer to provide that advice.
