I have an Enduring Power of Attorney from my Mother. A friend told me that the rules relating to Powers of Attorney are changing. Is that true, and if so, how will these affect the Power of Attorney that I already have?

Your friend was right. The law changed on 26 September 2008. The changes will affect the Power of Attorney that you hold in a number of important ways.

Up until now there have been very few regulations or rules on how an Attorney (that’s you, the person to whom the “power” has been given) used an Enduring Power of Attorney (EPA). In practice the Attorney was not accountable to anyone for what they did when using the EPA. The law changes were made because of the increasing concern about elder abuse in New Zealand. Financial abuse of older people is now considered to be the fastest growing type of abuse or neglect of them. Often this has been through the use of EPAs by the members of the older person’s family or whanau.

To deal with this abuse the Government has brought in changes which affect the way in which EPAs are signed and also in the way that they are administered. Under the old law there was no obligation on you to consult your mother, to act in any particular way, to keep records, or to report to any one on what you did when you used the EPA. This has all changed under the new law.

There are two types of EPAs – one in relation to property and another type in relation to personal care and welfare of the person making the EPA. If your mother has given you a Property EPA and she is incapable of handling her own affairs then you are obliged to use your mother’s property in the promotion and protection of her best interests. At the same time you are expected to encourage your mother to develop her competency to manage her own affairs in relation to her property. “Property” means more than real estate and includes everything owned by your mother.

With the recent law changes, you are now also obliged as far as practical to consult your mother when you use the EPA. This applies to both types of EPAs. Your mother should always be consulted on decisions about her property unless you have a doctor’s medical opinion which states that she has no capacity to understand matters about her property affairs.

If your mother has only given you one type of EPA, for example Property, and another family member has the other, Personal Care and Welfare, then you both need to work together and consult each other regularly to ensure your mother’s interests are looked after. As a Property Attorney you must give the Personal Care and Welfare Attorney any financial support required for that Attorney to carry out his or her duties in relation to your mother’s personal care and welfare.

If you use the Property EPA then you must now also keep records of each financial transaction. For example, if using your mother’s cheque account, you should keep copies of bank statements, invoices paid and details of other payments made. You should also be aware that you now cannot benefit personally by using your mother’s EPA unless your mother has specifically given you that power in the EPA itself. The new law does enable you to reimburse yourself for out-of-pocket expenses but this does not include lost wages or remuneration for looking after your mother’s affairs. And if you do this, we strongly recommend that you keep detailed records to support your reimbursement. This new law is to counter the financial abuse which older people were suffering as a result of misuse of EPA’s.

There are also new restrictions on using an EPA in relation to your mother’s personal care and welfare. For example, if you are making a significant decision relating to whether she should enter residential care, then you will need a doctor’s Certificate that she is “mentally incapable” as defined in the new law.

You might ask yourself what happens if you fail in any of these obligations. You can be fined up to $1,000 for failing to keep financial records when using a property EPA. Any decision made by you for your mother can be reviewed by a Family Court. An application to review an Attorney’s decision may be made by a wide range of people including your mother’s relatives, social worker, doctor, the manager of any rest home or hospital she may be in or an agency appointed by Government to prevent elder abuse or neglect. The changes to the law are extensive and much greater care will be needed by you when you use your mother’s Power of Attorney in the future.