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 an Authorised Financial Adviser (AFA) and former lawyer with experience in the financial services and trustee industries. Sonnie operates Fairhaven Wealth (www.fairhavenwealth.co.nz).