New Zealand Law Society - Enduring Powers of Attorney changes go live on 16 March

Enduring Powers of Attorney changes go live on 16 March

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The Statutes Amendment Bill containing amendments to the Protection of Personal and Property Rights Act 1988 (PPPR Act) passed its third reading on 14 December 2016 and has received Royal Assent.

The amendments to the PPPR Act will come into force on 16 March. Amended regulations including new plain language forms of Enduring Power of Attorney (EPA) and a plain language explanation of the effects and implications of entering into an EPA will come into effect on the same date. This will be the ‘go-live’ date for the amendments and new forms.

The drafting of the Protection of Personal and Property Rights (Enduring Powers of Attorney Forms and Prescribed Information) Amendment Regulations is being finalised and is due to go before Cabinet.

On and after the go-live date, you will need to use the new EPA forms contained in the regulations. The old forms will no longer be effective as the prescribed forms of EPA. If clients have completed EPAs on the old forms but they have not been signed by the donor and attorney(s) before the go-live date, they will need to be re-done on the new forms.

Consultation

NZLS CLE Ltd held a seminar “PPPR Act – changes ahead” in October 2016. The proposed (in draft) new forms were discussed, as were the implications for practitioners of the changes to the PPPR Act. There has been significant consultation in preparing the forms, including feedback from attendees at the October presentations.

The Ministry of Social Development has consulted with key stakeholders, including the property and family law sections of the New Zealand Law Society and some experienced lawyers, including Chris Kelly, Ala Sonti (formerly of the Public Trust), Nick Fagerlund from the Public Trust, and Elaine Henderson from Vicki Ammundsen Trust Law Ltd. Caroline Greaney from the Ministry of Justice was also consulted. There has been a tension between making the forms as simple and readable as possible while maintaining legal accuracy and clarity.

Changes made

Changes to the PPPR Act can be summarised as follows:

  • Less restrictive requirements for mutual appointments: New section 94A(4A) allowing the same authorised witness for the respective donors where there is no more than a negligible risk of conflict of interest.
  • Standard Explanations: New s 94A(6A) providing that the donor’s witness may use the standard explanation prescribed by regulations to explain the effects and implications of the EPA.
  • Additional certification requirements for the donor’s witness: See the fuller discussion below.
  • Optional provisions revoking previous EPAs and provision for giving notice of this revocation: New s 95A allowing a provision in the EPA to revoke all previous EPAs and for giving notice of this revocation, including after the donor loses capacity.
  • Duty of attorneys to consult: Section 99A(1) is amended to expand the duty. Consultation will be required with any other EPA attorney of the donor (but not with a successor attorney whose appointment has not taken effect).
  • Medical certificates of incapacity no longer in prescribed form: The medical certificate must still contain the prescribed information – as per the amended s 99D.
  • Revocation of appointment: Amended s 106 will allow the donor to revoke an attorney’s appointment without revoking the EPA if a successor attorney is appointed, and clarifies that an EPA appointing more than one attorney with several or joint-and-several authority will only cease to have effect when the last remaining attorney’s appointment is revoked by the donor under new s 106A or otherwise ceases to have effect.

Witness Certificate requirements

Of particular interest to practitioners will be the additional requirements to the Witness Certificate – the new section 94A(7)(ab).

“(ab) in the case of an enduring power of attorney signed by the donor after the commencement of this paragraph, the witness believes on reasonable grounds that the donor—

(i) understands the nature of the instrument; and

(ii) understands the potential risks and consequences of the instrument; and

(iii) is not acting under undue pressure or duress; and”

These changes can be found in Part 23 of the Statutes Amendment Act 2016, available on the legislation.govt.nz website.

The Forms

The Protection of Personal and Property Rights (Enduring Powers of Attorney Forms and Prescribed Information) Amendment Regulations will be available on legislation.govt.nz once they are made. The Amendment Regulations are intended to go to the Cabinet Legislative Committee this month and their making will be notified in the New Zealand Gazette. There will be a period of time for practitioners to familiarise themselves with the new forms and standard explanations. The main differences in the forms at a glance are:

  • Tick box format;
  • Forms available on-line as saveable Word documents;
  • Notes sections;
  • Glossary;
  • Plain English;
  • Information sections – left hand side;
  • Options sections – including option to revoke prior EPAs;
  • Expandable boxes (in on-line versions);
  • Changes to signature and witnessing sections;
  • Inclusion of witness certificate at the back of the EPA forms (as a result of feedback from the October seminar).

The bottom line is that from the go-live date, non-complying forms will not be lawful except to the extent that s 95(2) of the PPPR Act allows (ie, no substantive provisions are omitted and the differences are immaterial).

Form availability

It is intended that forms will be available on the Ministry of Social Development and Ministry of Justices’ websites. The forms will be available online in a “locked” Word document format that can be downloaded and saved. They will have expandable boxes and/or additional pages available to allow for the required information or conditions to be inserted. Practitioners and their clients will not be able to change the standard form, but will be able to fill in the form with the required details and specific conditions. Practitioners can download the forms and save them in their systems as standard precedents. The websites will not have provision to save the completed forms.

It is anticipated that the new plain language explanations will be helpful in complying with the requirement to explain the effect and implications of an EPA. They will be useful for donors and prospective attorneys and they will also be available online.

Frequently asked questions

I can’t find the amendments to the PPPR Act – where can I find them? They are set out in Part 23 of the Statutes Amendment Act 2016. They were not separated out into a Protection of Personal and Property Rights Amendment Act. They will be incorporated into the online version of the Protection of Personal and Property Rights Act 1988 on the go-live date.

What happens to old EPAs after the go-live date of the new EPA forms – do they become ineffective? No. Previous EPAs that have been executed by the donor and by the attorneys will still be effective. They are not invalidated. However, any medical certificate as to mental capacity that needs to be issued will need to be issued in compliance with the prescribed information contained in the new Regulation 5. You will need to make sure any office templates reflect these changes.

If the old ones will still be effective, should I “spook the horses” and tell my EPA base about these changes? It may be a useful time to do some house-keeping. Letting clients know that the law has changed and that they might want to review the state of their EPAs could help shake out problems with multiple EPAs in existence. This is also a good opportunity to encourage people to think about setting up an EPA if they don’t already have one.

What if the donor signed their EPA on existing forms before the go-live date but the attorneys haven’t completed signing until afterwards? The proposed EPA would not be effective. Section 94A requires the prescribed form to be signed by donor and attorneys to create a valid EPA. The EPA would need to be re-done on the new form (subject to s 95(2)).

I have my own precedents that I prefer to use. Can’t I just adapt new precedents to look like these? They would have to be substantially amended to replicate the new forms to such an extent for practical purposes it would not be viable. Instead, practitioners can download and save the forms as standard precedents. Forms 6-8 will remain unchanged, so you can continue to use your precedents for those forms.

What are the consequences if all the details prescribed in the new forms are not completed? The EPA may still be effective if it complies with section 95(2) of the PPPR Act, that is, if no prescribed provision is substantially omitted and the differences are immaterial. If it is not substantially similar and omits any prescribed provision then it will not be effective. See also section 103A.

Are there good resources I can refer my clients to? Yes. See the Super Seniors website. And don’t forget the standard explanation that will be available on 16 March, which clients may find of assistance.

Theresa Donnelly is Senior Solicitor and Neil Williamson Principal Solicitor at the Ministry of Social Development.