Talking Trusts: Are you prepared? The importance of enduring powers of attorney.
Sue and Jeremy were in their mid-thirties. Like most people their age, they had travelled extensively, living in London for a number of years, before returning home to the North Shore to start a family.
Sue had been in investment banking in the UK and Jeremy was a school teacher. The property market had shifted a bit in the years they had been away, but with the big money earned by Sue in the UK, they were able to afford a large and spacious home only a couple of blocks away from Milford beach.
After taking advice from their lawyer, Sue and Jeremy set up a trust to own their family home. Sue was taking on some directorships of companies and they were also concerned that if one of them died, their assets would be protected both for the survivor and their children.
At the same time they made wills appointing guardians of their children and stating that all their assets would go to the trust if one or both of them died. They prepared a memorandum of guidance for the trustees of their trust and also saw their insurance broker about putting place some life insurance.
Basically, death was covered. If one of them died, the survivor would have a large sum of money and assets all nicely protected in a trust. Enduring powers of attorney were mentioned, but Sue and Jeremy thought this was something they could do in the future. Sue’s Grandma had just appointed Sue’s father to act as her attorney - there was plenty of time for them to get enduring powers of attorney organised later.
Less than a year after returning to New Zealand, Jeremy woke one morning unable to speak or use the left side of his body. He had suffered a premature stroke. Sue and Jeremy soon found out it is not uncommon for young people to suffer strokes and other ailments which mean that they are not able to function properly. Sue and Jeremy had planned well for what happened if one of them died, but had not dealt with the situation where one of them might lose capacity.
Sue now found herself in the position of not being able to deal with a number of things that Jeremy used to deal with. Everyone was asking her for a copy of an enduring power of attorney she didn’t have. The costs of going to court to get property orders to manage Jeremy’s affairs were horrendous, but Sue was left with few options. She quickly learned that not only old people needed to worry about enduring powers of attorney – they are for everyone.
For further Trust Law advice, get in touch with Tammy and the Trust Law Team.
tammy@davenportslaw.co.nz | 09 883 4420
