A power of attorney is a written authorisation for  someone to manage your affairs on your behalf. The person you authorise is called an “attorney”.

Traditional powers of attorney have been around a long time, but are subject to some important limitations. First, there is a longstanding rule that if you lose mental capacity the power of attorney is automatically revoked. Secondly, the power of the attorney only extends to dealing with your property (and not personal matters such as your health). 

An Enduring Power of Attorney (or “EPA”) is a special form of power of attorney that the New Zealand government has instituted to address these limitations. Because of this, EPAs have become one of the cornerstones of putting your legal affairs in order.

Once your trust has been established it is very important that it is administered properly. Your trust achieves its objectives by separating ownership of your family’s assets from you personally. If the trust is not administered properly to make this separation of ownership clear then the trust could be challenged as a sham. Such a challenge could be made by a business creditor, relationship partner, the IRD or Work and Income New Zealand. If such a challenge is successful then the trust assets could be treated as your own personal assets and the benefits available through the trust structure will be lost.

Duties of directors

The Companies Act specifies the duties owed by the directors. In some cases, these duties are owed to the company (and so are only enforceable by the company or a receiver or liquidator of a company) and in some instances, the duties are owed to shareholders.

Establishing a family trust is a decision that can have a significant impact on the benefits you and your family can receive from your family assets.

It is therefore very important that the trust is established in such a way that it will meet the needs of you and your family. For this reason, trusts should not be established thoughtlessly using standardised documents. There are a number of particularly important decisions which you need to make in establishing a family trust. Your Lawlink lawyer is trained to identify and discuss these issues with you and to ensure that the family trust you establish will meet your particular needs.
There are six major things you need to think about before setting up a family trust.