Estate Planning: A Three Part Series – Preparing well for the road ahead – Part 1


If nothing else, the past 18 months has taught the world we are not invincible and planning in key. Part of personal planning is ensuring your estate matters are in order. This means your affairs are well documented, permitting a smooth transfer of assets to your heirs and avoiding unnecessary time and trouble being spent administering your estate.

This article is the first in a series of three which will discuss estate planning. Specifically, the articles will examine the key documents people habitually put in place to achieve their estate planning objectives and to safeguard their own and their loved ones interests. By reading these blogs, you’ll be able to determine if your own estate planning is in order.

Three Key Documents
Powers of Attorney, Wills and Memorandum of Wishes are the foundational documents good estate plans are built upon. These documents enable you to take control away from the Legislature and the Courts and vest control in the people you have the upmost trust in to serve your best interests and the interests of those you love and cherish.

This article, being the first in the series, will discuss Powers of Attorney and how they can assist you and your family in times of need.

Powers of Attorney
Circumstances can transpire where we are incapable of acting for ourselves. For example, we can be beset with an unexpected accident or illness which robs us of our mental and / or physical capacity. Advances made in medical science mean we frequently survive such circumstances but can suffer temporary or long term incapacity. In these type of situations, we need another person to have legal power to act on our behalf.

Traditionally, general Powers of Attorney were utilized by an individual (‘donor’) to vest legal power in another person (‘donee’) to empower them to act on their behalf. The problem that arises however with a general Power of Attorney document is as soon as the donor loses mental capacity, the donee also loses their legal authority to act for them. This is a real disadvantage to using a general Power of Attorney – at the very time you need someone to act for you, they are legally prohibited from doing so.
To combat against the above disadvantage, Enduring Powers of Attorney are used by donors. As their title suggests, the power vested in a donee prevails even when a donor loses their own mental capacity to act for themselves.

Enduring Powers of Attorney fall into two categories – those that relate to all your property which encompass all assets owned by you personally, and those that relate to your care and welfare.

Property – Enduring Power of Attorney
Under a Property Enduring Power of Attorney you can provide for a person to act for you immediately or only upon a particular event transpiring such as you becoming physically and / or mentally incapable.

It’s my personal preference donors authorise donees to act only in circumstances where they themselves are prohibited from acting through physical and / or mental impairment. Given the technological world we inhabit today, it’s hard to imagine circumstances where you are completely cut off from communication with others and cannot provide your own instructions. Empowering donees to act only when you yourself are unable to do so, minimises opportunities arising to mismanage either deliberately or inadvertently, the powers you’ve bestowed.

Aside from decreeing when your donee is empowered to act, you can determine the breadth and width of the powers you bestow. For instance, you may empower your donee to act only in relation to your share portfolio opposed to having power to act in respect of all your assets.

One final suggestion I have is to appoint more than one donee, requiring them to act jointly and severally, thereby establishing a checks and balance system and providing for circumstances when one donee dies or loses capacity themselves.

Care and Welfare – Enduring Power of Attorney
A Care and Welfare Enduring Power of Attorney document empowers your donee to make a range of decisions regarding your care and welfare, including the type of medical treatment you’ll receive and how long such treatment should be administered to you.

The comments I previously made regarding authorising your donee to act only in circumstances where you cannot act for yourself, prevail in relation to Enduring Care and Welfare Power of Attorneys. By implementing this suggestion you maintain your ability to make your own decisions regarding the personal care and welfare you want to experience.

Unlike Property Enduring Powers of Attorney, you can appoint only one donee to act for you at any one time. Do not take this to mean you can nominate only one donee. Rather, nominate another donee to act where your first choice cannot do so.
Besides from the above pointer, I recommend including a directive in your Enduring Care and Welfare Power of Attorney as to the medical care and treatments you want to receive, including life ending pronouncements.

Choosing your Donees
Providing other people with the legal power to act for you requires some serious thought. Not only must you truly trust them but the donees you select, must have the requisite skill, knowledge and personal characteristic required to carry out their functions. This often means the donee you infuse with power to oversee your property affairs is different from the person whom you select to manage your care and welfare. Your best friend may be a perfect choice for ensuring appropriate medical attention is administered but less than an ideal representative to act in relation to managing your share and property portfolio.

Additionally, your donees must possess the necessary characteristics to carry out their tasks. This means they need to be mentally and emotionally strong enough to do what is required of them, even in the face of opposition. You can help them somewhat by communicating in advance to your family and friends your wishes. This is an especially important point in relation to end of life directives.

Enduring Powers of Attorney are important estate planning documents and all those who want control over their assets, health and care should put them in place before situations arise where they are needed. These legal documents provide peace of mind and are a reasonably inexpensive instrument to have in your estate planning tool kit. Obtaining that peace of mind is a relatively easy exercise. It merely requires planning and communication. Greenlion Trustee Services frequently help clients with their estate planning needs. Should you need assistance or want to discuss any aspect of your estate planning affairs contact us. We’re here to help.

May 13, 2022


New Reporting Regime Now that we are completing Financial Statements and Tax Returns for clients for the 2022 financial year it’s appropriate to remind you of the increased scrutiny Trusts are receiving from the Commissioner of Inland Revenue Department (IRD). We informed you this would occur back in October 2021. You can read the article…

March 22, 2022

Estate Planning: A Three Part Series Preparing well for the road ahead – Part 2

“What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others.” Pericles, a Greek Statesman and Legislator was the orator of this insightful quote. He implicitly understood legacies, especially those founded in political power and worldly goods, could be used to benefit and progress society…