Ageless Safeguard: Enduring Power of Attorney.
Few know how important an Enduring Power of Attorney (EPA) is. Of those who do, even fewer understand the importance of setting up the legal document before becoming elderly. However, if unexpected life events occur, an EPA can make all the difference.
This scenario offers an example to help explain why...
Sarah and Josh are in their mid-thirties. Like most people their age, they had travelled extensively, living in London for a number of years, before returning home to New Zealand to start a family. Sarah had been in investment banking in the UK and Josh was a school teacher. The property market had shifted a bit in the years they had been away, but with the big money earned by Sarah in the UK, they were able to afford a large and spacious home only a couple of blocks away from the beach.
After taking advice from their lawyer, Sarah and Josh set up a trust to own their family home. Sarah was taking on some directorships of companies. They were also concerned that if one of them died, their assets would be protected both for the survivor and their children. At the same time they made wills appointing guardians of their children and stating that all their assets would go to the trust if one or both of them died. They prepared a memorandum of guidance for the trustees of their trust and also saw their insurance broker about putting in place some life insurance. Basically, death was covered. If one of them died, the survivor would have a large sum of money and assets all nicely protected in a trust.
Enduring powers of attorney were mentioned, but Sarah and Josh thought this was something they could do in the future.
Sarah’s grandma had just appointed Sarah’s father to act as her attorney – there was plenty of time for them to get enduring powers of attorney organised later.
Less than a year after returning to New Zealand, Josh woke one morning unable to speak or use the left side of his body. He had suffered a premature stroke. Sarah and Josh soon found out it is not uncommon for young people to suffer strokes and other ailments which mean that they are not able to function properly. Sarah and Josh had planned well for what happened if one of them died, but had not dealt with the situation where one of them might lose capacity.
Sarah now found herself in the position of not being able to deal with a number of things that Josh used to deal with. Everyone was asking her for a copy of an enduring power of attorney she didn’t have. The costs of going to court to get property orders to manage Josh’s affairs was expensive, but Sarah was left with few options. She quickly learned that not only old people needed to worry about enduring powers of attorney – they are for everyone.
Modern lives are more complicated and the documents that govern our affairs are also less straightforward than they used to be. Having an enduring power of attorney can be just as important as having a will. It is always better to document well upfront, rather than have to deal with a messy situation due to lack of planning in the future.
If you feel you could use some specialist advice, don’t hesitate to contact the Trusts & Wealth Protection Team.
