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A Guide To Enduring Powers Of Attorney
Enduring Powers Of Attorney
What Happens If You Don’t Have An Enduring Power Of Attorney?
Trusts And Estates – Delegating By Power Of Attorney
Who can be an attorney?
A trustee may, in limited circumstances only, delegate his or her powers, authorities and discretions to any donee “person” by way of power of attorney (section 31 of the Trustees Act 1956) if that donee is not the only other co-trustee and is not a trustee corporation.
A company is included as a “person”.
To confirm that the power of attorney is being exercised, the donee should complete a prescribed form Certificate from Schedule 4 of the Trustees Act entitled “Certificate that power of attorney has come into operation and that the donee is acting in the execution of the Trust or the administration of the Estate”. There is a separate Certificate for when the donee is a company.
The ability to delegate by power of attorney is also available to administrators of Estates.
A delegation by power of attorney is not officially a grant of administration to the donee. However, the donee is deemed to have the same powers, authorities, discretions, liabilities, and responsibilities as the donee would have if the donee were then the executor.
A Court may grant administration to the donee of a Power of Attorney if the donor is the sole executor or person who may apply for letters of administration, but only in the circumstances set out in section 9A of the Administration Act 1969.
Pursuant to the Administration Act, no Grant of Probate or Letters of Administration can be made to any company unless such grant is to a trustee company (namely Trustees Executors Limited, Perpetual Trustee Company NZ Limited, PGG Trust Limited, New Zealand Permanent Trustees Limited, and The New Zealand Guardian Trust Company Limited), or unless the document providing for the appointment was made before 1 January 1963. A company or company directors cannot be granted the power to nominate any person as executor – such a grant is deemed to be a grant to the company.
It is probable that this means an executor is not able to delegate (including appointing as attorney) his or her role to a company (other than a Trustee Company). If an executor could do so, it would appear to defeat the clear purpose of the Administration Act.
Circumstances when an attorney can be appointed
There are four circumstances when a trustee may delegate his or her duties to an attorney under the Trustees Act, namely when the trustee:
- is for the time being out of New Zealand or is about to depart from New Zealand; or
- expects that he or she may be absent from New Zealand from time to time during the administration of the Trust; or
- is or may be about to become temporarily incapable, by reason of physical infirmity, of performing all his or her duties as a trustee; or
- expects that he or she may be from time to time temporarily incapable, by reason of physical infirmity, or performing all his or her duties as a trustee.
This does not extend to circumstances where the trustee is simply absent from his or her place of work or residence, but is still in New Zealand.
There are two circumstances when a grant of administration may be made to the holder of an enduring power of attorney (s 9A, Administration Act), namely if the donor:
- is or becomes mentally incapable on the date of a person’s death, or within 3 months after that date; or
- applies for a grant of administration and becomes mentally incapable before the Court finally determines that application.
If the donor dies while the attorney is acting, the attorney must apply to the Court within 3 months from the date of the donor’s death to seek for approval to continue to act as administrator (s 9B).