When someone loses mental capacity without an enduring power of attorney (EPA) in place, their family has no automatic legal authority to step in and manage their affairs.
Banks may restrict access to accounts, medical providers will limit the decisions the family can make, and property can’t be sold or transferred without a court order.
The primary way to gain legal authority in this situation is through a Family Court application under the Protection of Personal and Property Rights Act 1988 (Act).
If you’re facing this right now, you’re not alone, and there is a clear legal path forward.
Why Don’t Family Members Have Automatic Legal Authority in New Zealand?
Being someone’s spouse, adult child, or next of kin doesn’t give you the legal right to make decisions on their behalf once they lose mental capacity. This surprises many families, but it’s how the law works in New Zealand.
A person is presumed to have capacity until the contrary is shown. Once capacity is lost, no family relationship, no matter how close, automatically transfers decision-making power.
This principle exists to protect vulnerable people from decisions being made without proper safeguards.
Without an EPA or a court order, a spouse can’t access their partner’s individual bank account, an adult child can’t consent to their parent’s medical treatment, and no one can sign legal documents on the incapacitated person’s behalf.
The legal gap catches families off guard at the worst possible time, often during a medical emergency, a sudden decline from dementia, or in the aftermath of a stroke or serious accident.
An estimated 83,000 New Zealanders are living with dementia as of 2025, and that number is projected to nearly double to an estimated 170,000 by 2050.
With an estimated half of all dementia cases going undiagnosed, many families won’t realise there’s a problem until it’s too late to put an EPA in place.
What Changes Practically When Someone Loses Capacity Without an EPA?
The day-to-day consequences are immediate and far-reaching, affecting almost every part of the person’s financial, medical, and personal life.
Without legal authority, family members find themselves unable to do things they assumed they’d always be able to handle.
What Happens to Bank Accounts and Financial Affairs?
Banks may restrict access to the person’s accounts or refuse to accept instructions from family members once they become aware of the loss of capacity.
Banks have obligations to protect their customers, and they shouldn’t take instructions from someone who doesn’t have legal authority to act on the account holder’s behalf.
The bank’s response will depend on the type of account, the evidence available, and the circumstances, but the practical effect is often the same: a spouse or adult child who has been helping manage the person’s finances informally won’t be able to withdraw funds, pay bills, or set up direct debits.
Joint accounts may also be affected, depending on the bank’s terms and conditions, the account mandate, and how the bank assesses the situation.
Everyday expenses like mortgage payments, rates, insurance premiums, and power bills can fall behind quickly.
If the person receives New Zealand Superannuation or another benefit, that income may continue to be deposited, but nobody can access it to pay for the person’s care.
How Are Medical Decisions Handled Without an EPA?
In a genuine medical emergency, doctors can and will make treatment decisions to save a person’s life or prevent serious harm.
Family input is often sought in those situations, but the final decision rests with the medical professionals, not the family.
Outside of emergencies, providers may still be able to provide treatment in some circumstances under Right 7(4) of the Code of Health and Disability Services Consumers’ Rights, even where no EPA attorney or welfare guardian has been appointed.
Under Right 7(4), a provider may treat a person who isn’t competent to consent if the provider takes reasonable steps to find out the person’s views, considers the views of suitable people interested in the person’s welfare, and acts in the person’s best interests.
However, family members still don’t have formal consent authority in these situations, and significant decisions about long-term care, non-urgent surgery, or living arrangements will generally require someone with legal authority to act.
Without an EPA or a court order, families often find themselves in a position where they can offer input, but can’t direct the care their loved one receives.
What Happens When the Family Home Needs to Be Sold or Rest Home Care Is Arranged?
If the person needs to move into residential care and the family home needs to be sold to fund it, no one can sign the sale and purchase agreement on their behalf without legal authority.
The outcome may differ where the property is jointly owned, held in a trust, or owned through a company, but where the person is the sole owner, the property effectively can’t be dealt with.
Entering into a rest home admission agreement may also require someone with authority to sign on the person’s behalf, depending on the nature of the agreement and the decisions involved.
This creates a frustrating loop: the person needs care, the care needs to be paid for, the funds are tied up in property that can’t be dealt with, and access to bank accounts is restricted. A court application under the Act is usually needed to break this loop.
What Is the Difference Between an EPA and a Court-Appointed Role Under the Act?
An EPA and a court-appointed welfare guardian or property manager serve similar purposes, but they work very differently in practice.
The table below sets out the key differences between the two.
| EPA | Court-Appointed Role under the Act | |
| Who chooses the decision-maker | The person themselves, while they still have capacity | The Family Court decides |
| When it can be set up | Only while the person has mental capacity | When the person wholly or partly lacks capacity for the relevant decisions |
| Cost | A one-off legal fee to prepare the documents | No court filing fee, but costs for medical reports, the applicant’s own legal fees, and other expenses; the court-appointed lawyer for the subject person is generally government-funded |
| How long it lasts | Until revoked, the donor dies, or is ended by another statutory event | Up to three years, then must be reviewed by the court before the order can continue |
| Time to activate | Once a medical certificate confirms loss of capacity (a property EPA may also be set to operate immediately) | Weeks to months, depending on whether the application is contested |
| Court involvement | None required to activate | Full Family Court process, including appointment of a lawyer for the subject person |
| Ongoing oversight | Limited, unless specified in the EPA or a complaint is made | Property managers must file financial statements with the court; welfare guardian orders are reviewed at least every three years |
The key takeaway is that an EPA is faster, cheaper, and gives the person control over who makes decisions for them.
A court application under the Act achieves a similar outcome, but it takes longer, costs more, and the court has the final say over who is appointed.
What Are the Legal Options When No EPA Exists?
When someone has lost mental capacity and no EPA is in place, the main legal path is an application to the Family Court under the Act.
The Act provides several types of orders, but the two most common appointments are a welfare guardian and a property manager.
For smaller estates, the court may instead make an order to administer property, and in some situations, a specific personal order addressing a particular issue may be more appropriate than a full appointment.
A lawyer can advise on which type of application suits your family’s circumstances.
A welfare guardian is appointed under section 12 of the Act to make decisions about the person’s personal care and welfare.
This includes decisions about where the person lives, what medical treatment they receive, and how their day-to-day care is managed.
The court will only appoint a welfare guardian if it’s satisfied that the person wholly lacks the capacity to make or communicate decisions about their personal care, and that appointment is the only satisfactory way to ensure appropriate decisions are made.
A property manager is appointed under section 31 of the same Act to manage the person’s financial and property affairs.
This can include bank accounts, investments, and paying bills, though the property manager’s powers are defined and limited by the court order.
Property managers have ongoing reporting obligations and must file financial statements with the court.
In many cases, a family member will apply for both roles at the same time.
The application process involves filing forms with the Family Court, obtaining a medical report confirming the person’s loss of capacity, and providing an affidavit setting out why the orders are needed.
The court will appoint an independent lawyer to meet with the person and report back on whether the application is appropriate.
The court arranges for the prescribed people to be served or notified, which typically includes close family members and relevant care providers.
Can the Family Court Act Urgently if a Decision Can’t Wait?
Yes, the Family Court can grant interim orders on an urgent basis if a decision needs to be made before the full application is determined.
An interim welfare order can last up to six months, while a temporary property order can last up to three months.
Either type gives the applicant temporary authority while the substantive application is processed.
This is particularly important when the person needs immediate medical treatment, when bills are overdue, when access to accounts is restricted, or when urgent decisions about living arrangements need to be made.
To obtain an interim order, the applicant files a “without notice” application, and a lawyer for the subject person is urgently appointed to report to the court. A judge will then consider whether an urgent order is justified in the circumstances.
Even with an interim order, the full application still needs to proceed through the standard process.
Is the Law Around Mental Capacity in New Zealand Likely to Change?
The Act has been in force since 1988 and is widely regarded as overdue for reform.
In February 2026, the New Zealand Law Commission presented its final report to Parliament, recommending that theAct be repealed and replaced with entirely new legislation.
The report, which contains 175 recommendations, calls for a shift toward supported decision-making, where people receive help to make their own decisions rather than having decisions made for them.
The Law Commission found that the current law’s focus on “best interests” can be paternalistic and may not reflect the person’s own wishes and values.
The proposed new Act would continue to provide for court-appointed decision-makers, but with significant changes to how they’re selected, supervised, and held accountable.
The Government is now considering these recommendations, and no legislative timetable has been announced.
For now, the Act remains the law, and families dealing with a loved one’s loss of capacity will need to work within the current framework.
Need Help With a Family Court Application Under the Act?
Discovering that a family member has lost capacity without an EPA in place is stressful, and the legal process that follows can feel overwhelming.
Acting quickly matters because until a court order is in place, nobody has the authority to manage the person’s affairs or make decisions about their care.
As estate planning and elder law lawyers in New Zealand, Evolution Lawyers can help you with Family Court applications under the Act, including applications for the appointment of welfare guardians and property managers.
Contact our team today to discuss your situation.
Frequently Asked Questions
Can a family member access a loved one’s bank account if they lose mental capacity?
No, a family member can’t access another person’s bank account simply because they’re related. Banks have obligations to protect the account holder and shouldn’t accept instructions from someone without legal authority. Without an activated enduring power of attorney for property or a court order under the Act, nobody has authority to operate the account.
What is the difference between a welfare guardian and a property manager?
A welfare guardian is appointed by the Family Court to make decisions about a person’s personal care and welfare, including medical treatment and living arrangements. A property manager is appointed to handle the person’s financial affairs, such as managing bank accounts, paying bills, and selling property. Both roles are created under the Act.
How long does it take to get a welfare guardian or property manager appointed?
The timeframe depends on the complexity of the case and whether any family members oppose the application. Straightforward, uncontested applications may be resolved within weeks, though this isn’t guaranteed. Contested cases can take several months. In urgent situations, the Family Court can grant interim orders providing temporary authority while the full application is processed.
Can someone who has lost mental capacity still make an enduring power of attorney?
An EPA can only be created while the person has the mental capacity to understand the document’s nature and effect. If they currently lack that capacity, they can’t sign a valid EPA. However, capacity can fluctuate or return, so a medical assessment is worth pursuing. If capacity is confirmed as absent, a Family Court application under the Act is needed.
Who can apply to the Family Court for a welfare guardian or property manager order?
A range of people can apply, including a relative of the person, a social worker, a medical practitioner, a representative of a non-profit organisation that provides welfare services, or the person in charge of a hospital or care facility where the person resides. The court also appoints an independent lawyer to represent the subject person’s interests throughout the process.
How long does a welfare guardian or property manager appointment last?
Both welfare guardian and property manager orders have expiry dates set by the court, typically lasting up to three years. Before that date, the appointed person must apply for a review. If a review isn’t sought in time, the order lapses and the person’s authority ends. The court won’t send a reminder, so tracking the review date is essential.