Why I'm paying for my children to get EPAs when they turn 18

If something were to happen to you, and you were to lose the ability to make and communicate decisions, who would make those decisions for you?

There's a misconception that your spouse or next of kin can step in. That's not strictly true. If you've ever tried to talk to a utility provider when your wife, husband, or another family member is the person named on the bill, you'll realise how difficult it can be. 

The answer is: Whoever you've nominated in a properly executed Enduring Power of Attorney document (EPA).

If you haven't prepared an EPA, then your partner or parents (or whoever thinks they are the most appropriate person) needs to go to the Court. The Court can grant similar powers to those granted by an EPA, but you are looking at months of delay and thousands of dollars of additional cost during an already difficult time. (And there will be some fishhooks attached that wouldn't be there if you'd just signed an EPA.) 

Paying to have EPAs prepared is similar to paying for insurance premiums. You pay a small amount upfront, in the hope that you never have to rely on them. But it gives you peace of mind that should something happen to you, you've nominated the right people, and you've given them the appropriate authority to act on your behalf.

(In terms of cost, both of my former employers - Perpetual Guardian and Malley & Co lawyers - charged similar amounts for preparing EPAs. You are looking at somewhere in the vicinity of $600 including GST to prepare a full set of EPAs for a husband and wife. From there, prices go up.)

I have EPAs in place. Because I love my wife. If anything happens to me, her life will be hard enough. I don't want to create even more cost, time delay, and stress for her. It's the same reason I have life insurance, TPD insurance, trauma insurance, and income protection insurance.

When our children turn 18, we will pay for them to get EPAs. I know that an 18-year-old won't voluntarily fork out $300 to have EPAs prepared in case something happens to them.

But if something happens to them? My wife and I are likely to have to step in and make decisions for them. If they don't have EPAs, we'll have to go to the Court and deal with months of delay and thousands of dollars of costs. 

If I have young adult children, I won't want to deal with this. There will be a whole other set of emotional and practical considerations. Ostensibly, the EPAs are for them. But in practical terms, the EPAs will be in place for me as well. 

(In my opinion, EPAs are probably far more important for an 18-year-old than a will. But that's the subject of another post...)

Sonnie Bailey

Sonnie is the founder and principal of Fairhaven Wealth.

Before founding Fairhaven Wealth, Sonnie worked in the legal and financial services industries for over a decade.

Sonnie first became involved with financial advice as a specialist financial services lawyer. For many years, he was an “adviser of advisers”, reviewing thousands of advice files prepared by hundreds of financial advisers, and providing feedback in relation to the quality and appropriateness of advice; industry best practice; risk management; and regulatory compliance. He has published work in industry publications and spoken at various financial advice conferences.

Sonnie has also worked with banks, investment management firms, insurers, and derivatives providers.

Sonnie has worked as a private client lawyer, focusing on succession, estate planning and trusts. He ran his own legal firm in Australia before relocating to New Zealand. He has also acted in independent trustee and company director positions.

Sonnie is passionate about helping people achieve their goals and manage the risks to which they are exposed.

He has written extensively on his blog, New Zealand Wealth and Risk, which can be found at www.wealthandrisk.nz.

Sonnie is married to his wonderful wife Chrissy, and has two young children, Ben and Anna.