Ready for Anything

Introduction

New Zealanders are living longer than ever, enjoying better health, having the company of their spouses or partners for lengthier periods, and remaining living in their own homes in greater numbers.

Retirement with a gold watch at the age of 60 has long gone, and retirement itself may be on the way out—now, and in the future, some people may never retire at all. As well as the financial rewards of their jobs, these people enjoy the stimulation, companionship and challenges that employment provides. The rise of the internet has increasingly blurred the lines between people’s work and leisure, as home businesses take off and niche marketing means that people can set up enterprises and market goods and services to customers all over the planet.

Longer lives mean that people may have two or three marriages or long-term relationships, rather than just one. Fifty has become the new 40, and people who were once considered over-the-hill in their 60s are now looking forward to some of the most enjoyable and stimulating years of their lives.

One way to make the golden years even more enjoyable is to plan ahead and ensure that your affairs are in order—not only for your own sake, but for the sake of your partner, children and other family members. You should carry out a legal audit of your affairs, and also prepare an emergency kit containing essential information about practical matters so that if you become ill or incapacitated, information is readily to hand for your family. Have a look at the Resources section of this book for a list of information you might like to include.

The first section of this book helps you ensure that your wishes are carried out, and that your family is not left to try to guess your desires in times of stress or emergency. It covers what you need to know about powers of attorney and living wills; wills and how they work, including probate and administering an estate; funeral arrangements; and what laws exist to protect you should you have none of these things set up in advance. It does not take much time to conduct a legal audit of your affairs, and it can save much future grief.

Ready for Anything also seeks to arm you with the information you need to make decisions about a range of matters affecting your life as a senior citizen. These include your living situation. Will you stay in your own home, but make it safer and organise home help? Will you move into a retirement village, or into residential care? There is a wide range of options as to how you might choose to live, and Chapters 4 and 5 cover the pros and cons of each, as well as the practical aspects of making the right decision for you.

Along with decisions about your home come decisions about your financial position. Will you decide to leave paid employment, and what are the alternatives? Are home equity release schemes a good idea? What is your superannuation entitlement? What subsidies can you access for home or residential care?

Ready for Anything goes on to discuss voluntary work and study for the many older people who have absolutely no desire to take it easy as they age. Information and tips about elder abuse and neglect aim to help you protect yourself from being exploited or otherwise abused, and to know what to do about it should it happen.

Family members will often find themselves responsible for caring for parents or other elderly relations, so i have included a chapter of advice for such carers. Finally, there is information about the many resources available both to older people and to their carers—via the internet, by telephone, in writing, and in person.

Maintaining quality of life is an important aspect of ageing. Throughout the book, there is a range of stories about older people doing interesting, stimulating and creative things, or devoting time to helping others. Some see retirement as offering the freedom to develop new passions—or to devote more time to lifelong passions; others plan to never actually retire. The stories include those of: Bev Wood, who went to Vietnam to work as a volunteer in her late 60s; Radio Waatea host and prominent kura kaupapa principal, Jim Perry; and Trevor, who is as passionate about pipe bands in his 70s as he was as a 12-year-old. Other profiles include those of: Noeline Nuttall, who was awarded an MBE for her services to the community she is still working for at the age of 84; Helen Storr, who talks about caring for her frail and elderly mother; and Phil Mansor, who has devoted his life to the union movement and still goes in to the office for a few hours even though he is in his mid-80s.

Lastly, prices quoted throughout the book were correct at the time of writing, but are of course subject to change.

Section A

Getting the legal stuff right

No one likes to think about what would happen if they had an accident and ended up incapacitated—but if this happened to you, wouldn’t you like to have some control over the rest of your life? Control over what happens to your property, where you live, and what sort of medical treatment you would receive? The answer would surely be yes. By setting up powers of attorney and living wills while you are fit and healthy, not only can you ensure that your wishes will be carried out, but you will save your family having to make difficult decisions for you. These vital legal tools are covered in Chapter 1.

Equally, you can save your family much anguish—as well as safeguarding its inheritance—by ensuring that you have made a will. All the information you need to know about making a will and how they work is covered in Chapter 2, along with additional information on funeral arrangements; another area in which you can help your family cope with your death.

Should you become incapacitated or die with none of these things in place, the law will step in and appoint people to sort out your affairs. But, while the law provides some degree of protection, you cannot guarantee that your wishes will be followed, and often there are lengthy—and costly—legal procedures that must be followed. Chapter 3 goes through the provisions of the current laws.

Chapter 1

Safeguard your wishes

The best time to review your affairs and ensure that they are in order is when you are in good health, and life is sailing along smoothly. Doing this means that you can make decisions when you have full capacity and are not under pressure as a result of an accident, illness or other type of emergency. By spending a little time to put your affairs in order, you can not only ensure that your wishes are carried out, but you can also smooth the way for your loved ones in the event that they have to deal with you being ill or incapacitated. It is essential to have a power of attorney, an enduring power of attorney, and a will (see following chapter) if you want to retain control over your life in such circumstances. If you want to make your wishes clear about what medical interventions should be made on your behalf in the case of a serious emergency, it is also a good idea to prepare a living will; those are also covered in this chapter.

Powers of attorney

Start your legal audit off by considering who would handle your financial and other affairs if you were unable to do so, either for a short time or permanently. This is where powers of attorney come in. If you do not have them, you should organise to execute them as soon as possible.

A power of attorney gives another person the legal authority to act on your behalf if you become unable to look after your own affairs. This might be because you are suffering from a degenerative disease, you have an accident, or you become terminally ill. In such instances, you may no longer be capable of making decisions about managing your property, dealing with your money, paying bills, maintaining your home and a host of other issues. Many people believe that their spouses or partners can automatically step in if such an eventuality occurs, but that is not correct. They have no legal authority to take over your affairs unless you have set this up in advance.

There are two types of powers of attorney: an ordinary power of attorney and an enduring power of attorney.

Ordinary power of attorney

An ordinary power of attorney involves you appointing someone to help you look after your affairs. The person is known as your attorney. You can still continue to look after your affairs yourself, but your attorney can help you with this.

Ordinary powers of attorney remain valid only so long as you continue to have legal capacity. Having legal capacity means that you are able to manage your own affairs. Once you are no longer capable of instructing your attorney, his or her power ceases to be effective. This could occur, for example, if you had a stroke and were brain-damaged, or if you were severely injured in an accident. An ordinary power of attorney also ceases to be effective as soon as you die. At that time, power to manage your property will pass to the executor you have named in your will; if you have no will, the law makes other provisions.

Breadth of powers

It is up to you to decide the breadth of the powers you want to give to your attorney. You can authorise him or her to look after all of your property, or only some of it. You may make an appointment for only a limited period—if you are going overseas, for example, and want someone to look after your property for three or six months, or perhaps deal with tenants if you are renting out your home or other property in your absence.

Choosing who to appoint

You can appoint as many attorneys as you want. However, if you appoint more than one, you should specify whether they are to act together or separately. Appointing more than one attorney means that one person is not left with complete power to deal with your affairs, and provides the safeguard of someone looking over an attorney’s shoulders.

Attorneys are not required to consult you before making decisions, and you are bound by their actions, so it is vital that each person is trustworthy and competent. Be sure that they have the skills and experience not only to manage your affairs well, but also to keep good records.

You can appoint a family member, lawyer or other professional, a friend, or a trustee company. If you appoint a lawyer or a trustee corporation, they will need to be paid for their work. If you are choosing a family member or a friend to act as an attorney, ensure that it is someone you can trust to act in your best interests and not misuse their position. If a family member is likely to benefit from your will, consider if this would involve them in a conflict of interest if you also appoint them as your attorney. For that reason, some people prefer to appoint someone independent from outside the family as an attorney.

How to appoint an ordinary attorney

An ordinary attorney is appointed by completing a form obtainable from a lawyer, stationery shop, trustee company or community law centre. You need to specify in the document the scope of the powers you want to give to the attorney. It will then be signed by both you and the attorney. Both of you must have your signatures witnessed by a third party.

You can amend, extend or revoke the power at any time by placing your new directions in writing, and signing and witnessing the new power of attorney form. Make sure that you notify anyone who has been relying on the old power of attorney, as they are entitled to continue operating under it until notified of the change. Signing a new power of attorney will not automatically revoke the old one unless you specifically state that.

The attorney will need to have access to the original power of attorney document as evidence of authority to act. You should make copies of the authority and keep one for yourself, as well as giving copies to others who may need to be aware of your arrangements.

Enduring power of attorney

An enduring power of attorney enables an attorney to act for you if you become mentally incapable. However, you have to execute the power of attorney before you are incapacitated, or it will not be valid.

If you have already suffered an accident or illness rendering you incapacitated, you can no longer give an enduring power of attorney. In such a case, family members wanting to act on your behalf need to apply to the court for orders under the Protection of Personal and Property Rights Act 1988; this is covered in Chapter 3. Many retirement villages require new residents to have executed enduring powers of attorney, both in relation to property and for personal care and welfare, before entering the village. This is so that there is someone available to act on behalf of the resident if he or she becomes incapacitated. Otherwise, the village operator could be left awaiting the outcome of court proceedings for someone to obtain authority on behalf of the resident.

The relevant law

Mental incapacity and powers of attorney

Enduring powers of attorney are provided for by the Protection of Personal and Property Rights Act 1988, sections 94 to 108. Section 94 states that a person is ‘mentally incapable’ for the purposes of an enduring power of attorney if:

in relation to property, the person is not wholly competent to manage his or her property, or

in relation to personal care and welfare, the donor lacks capacity to understand the nature and foresee the consequences of decisions about personal issues, or has capacity to understand and foresee, but wholly lacks capacity to communicate decisions.

Section 96 states that an enduring power of attorney is not revoked by a donor’s subsequent mental incapacity. This means that, unlike an ordinary power of attorney, an enduring power of attorney will not cease to have effect if you become mentally incapable.

Types of enduring power of attorney

There are two types of enduring powers of attorney: a property enduring power of attorney, and a personal care and welfare enduring power of attorney. It is a good idea to provide for both types of attorney. They do not need to be separate people; you can give both powers to one person if you want to. As with an ordinary power of attorney, you can authorise the attorney to act in respect of all of your affairs, or only some of them. You can also specify what you wish to be done with your property, and what you want to happen to you.

Property powers

An enduring power of attorney in relation to property authorises the attorney to act on your behalf in relation to your property. This includes not only land and houses, but also household possessions, shares, bank accounts, businesses—anything at all that you own. As with other powers, the property power may be limited to specific pieces of property or extended to everything you own.

Section 97 provides that, when a donor authorises an attorney to act in relation to property, the attorney shall have power to do anything in relation to the property which the donor could do themselves. You should spell out whether you want the power to apply only if you become mentally incapable, or whether you want it to take effect straight away, and continue to be valid if you become mentally incapable.

If your attorney is dealing with all decisions relating to your entire property, he or she may have to decide whether to sell your home or business, whether to take out a mortgage, how to manage your business, and where to invest money. These are major decisions, so you may want to appoint two attorneys to deal with your property. Before making an appointment, discuss with the attorneys what you want them to do and ensure that they are willing to undertake those tasks. Ensure that they have access to all the relevant documents, keys, passwords and other information that they will require.

Personal care and welfare powers

Apersonal care and welfare enduring power of attorney authorises your attorney to make legal decisions about your personal care if you become mentally incapable. Such decisions might include whether you go into a rest home or hospital, and what sort of medical treatment you will receive. As with other powers of attorney, the authority you give your attorney can be a broad one, or can be restricted to specific matters.

Your attorney is not able to act in respect of your personal care and welfare unless you are mentally incapable (section 98). However, even if you have given your attorney a general (broad) authority, there are some decisions he or she cannot make. An attorney cannot refuse life-saving medical treatment for you, make decisions about marriage, or give consent to medical treatments involving brain surgery, electroconvulsive therapy, or medical experiments.

Only one person can be appointed as an attorney in relation to personal care and welfare matters, but you can name another person to act if your first attorney is no longer able to do so. Such attorneys must be private individuals—you cannot name a trustee company. People generally choose their spouses or partners as their personal care and welfare attorneys, but you will need to ensure that your spouse or partner is in good health and will be able to fulfil the responsibilities of the position.

Attorney protecting a donor’s interest

An 84-year-old woman suffering from cognitive degeneration appointed her niece and nephew as her attorneys to manage her property under an enduring power of attorney. The woman’s husband also executed an enduring power of attorney in favour of the niece and nephew. The husband died, leaving a will appointing his wife as sole executor and trustee and leaving her his whole estate.

While dealing with their aunt and uncle’s property, the attorneys found that $260,000 had been paid to the couple’s medical practitioner over six years. They also discovered that $60,000 had been paid to the doctor’s de facto partner. There was nothing in writing as to the reasons for the payments. The attorneys applied to the High Court for orders that the sums be repaid, together with interest. The doctor claimed that he had agreed to provide medical services to the couple in exchange for the money they were advancing him, and that the value of those medical services over six years totalled $235,000. He said that there was an implied agreement that, if he ceased to be the couple’s medical practitioner, he would repay the difference between the value of the loans and the cost of the medical services.

The attorneys argued that as their aunt and uncle were patients of the doctor when the payments were made, there was a presumption of undue influence. They also argued that an unconscionable bargain had been made, and it should be set aside. At a preliminary hearing, the court refused to grant the attorneys summary judgement, saying that the case would have to go to trial as it was possible the doctor had a defence.

The trial’s outcome had not been reported at the time of writing. The doctor’s de facto partner had repaid the $60,000 when she was served with the proceedings, and she was ordered to pay interest on the money to the attorneys. In addition, the doctor was struck off the medical register after pleading guilty to breaching his position of trust by accepting the money, and being found guilty of failing to provide the couple with an adequate standard of care.

Conflicts and court involvement

If there is a conflict between the personal care and welfare attorney and the property attorney, the powers of the personal care and welfare attorney will prevail (section 99). The exception is if an attorney brings court proceedings about the issue and a court rules otherwise. Attorneys have the power under section 101 to go to court and seek directions from a judge as to how to exercise their powers.

Courts have wide powers under section 102 to make decisions about enduring powers of attorney. They can decide:

whether or not a document actually is an enduring power of attorney

whether the donor has become