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Communtity Law Manual | Decision making & powers of attorney | Property orders and property managers: Decisions about your money and property

Family Court orders for your welfare and property: How decisions can be made when there’s no EPA

Property orders and property managers: Decisions about your money and property

Overview

Different orders the Family Court can make to deal with your property and finances

Protection of Personal and Property Rights Act 1988, ss 11, 31, 100

If you’re not considered to be “mentally capable” of managing your own money and property, the Family Court can appoint someone to make decisions for you.

The judge can make one of two kinds of orders here:

  • Personal orders to deal with smaller amounts of property – If the property isn’t large (that is, no single item is worth more than $5,000 or any income or benefit is less than $20,000 a year), the court may make a personal order appointing someone to administer the person’s property, instead of making a full property order. The grounds for making a personal order must be met (see “Personal orders” above in this section).
  • Appointing a property manager for you – The Family Court judge can make a “property order” appointing a property manager for you if you aren’t able manage your own property affairs (see “The judge’s decision to appoint a property manager” below). Property managers can be appointed for property of any value. As far as possible, the court will try to find out the wishes of the person concerned when appointing a property manager.

    Protection of Personal and Property Rights Act 1988, ss 24, 25

    Note: The law assumes you’re capable of managing your own money and property, unless someone proves otherwise. The Family Court can’t appoint a property manager for you just because you’re making decisions about your money and property that may not seem reasonable to others.

Asking a trustee company to be property manager: An alternative to going to court

Protection of Personal and Property Rights Act 1988, ss 32, 33, 34

If you’ve lost, partly or completely, the ability to manage your own property, you (or your relatives and other people in some cases) can apply directly to a trustee company asking it to manage your property, instead of applying to the Family Court for a property order.

You have to apply in writing and also include:

  • certificates from two doctors (at least one must be independent from you and your family), and
  • a statutory declaration signed by you, stating that you’ve received advice from a lawyer about the application.

The trustee company’s role begins as soon as they accept the application and file it in the Family Court. They are now your property manager, with all the rights and powers that you’ve specified in your application.

Other people such as a relative or doctor can also apply if your property is worth less than $100,000 in total. Their application also has to include the doctors’ certificates and a statutory declaration from you.

You can withdraw your property from the trustee corporation’s control by giving them seven days written notice.

The judge’s decision to appoint a property manager

How will the judge decide whether to appoint a property manager?

Protection of Personal and Property Rights Act 1988, ss 25, 29

The Family Court will make a property order appointing a property manager for you only if:

  • you’ve completely or partly lost the ability to manage your own property affairs, and
  • the judge thinks the order is necessary.

We explain those two separate factors below.

Question 1: Are you unable to manage your own money and property?

Protection of Personal and Property Rights Act 1988, ss 24, 25, 29(1)

The judge can make a property order for you only if you’ve completely or partly lost the ability to make decisions about your money and property.

The judge will look at various kinds of evidence to decide this, including medical evidence about your memory and level of understanding, about your ability to focus on issues, and about your ability to exercise judgment and form opinions and communicate your views and decisions to other people. They’ll also look at any affidavits (sworn statements) from family, friends and health professionals who know you and who’ve been in a position to observe you.

The law assumes you’re able to manage your own property affairs, unless someone proves otherwise. The Family Court can’t appoint a property manager order for you simply because you’re making decisions the average person wouldn’t make.

Question 2: Is a property manager necessary?

Protection of Personal and Property Rights Act 1988, ss 28, 29

If the Family Court judge decides you’re not capable of managing your money and property, they’ll then decide whether you need a property manager and, if you do, what rights and powers the manager should have.

The judge must intervene as little as possible in your life, taking into account how far you’ve lost the capacity to manage your own affairs. They must also allow and encourage you to make your own decisions as far as possible.

Protection of Personal and Property Rights Act 1988, s 30

If the judge decides there’s an urgent need to protect your property, they can appoint a property manager temporarily, for up to three months. You won’t necessarily know that someone has applied for a temporary order, and you don’t have the right to attend or be heard at the court hearing unless the judge orders this. To make a temporary order the judge doesn’t have to be satisfied that you’ve lost “mental capacity”, just that there are “reasonable grounds” for believing this.

Who will the judge appoint as my property manager?

Protection of Personal and Property Rights Act 1988, s 31

The Family Court judge can appoint either an individual person (who has to be at least 20) or a trustee company like Public Trust or Te Tumu Paeroa/the Māori Trustee. The judge can appoint more than one property manager.

The judge has to be satisfied the person or organisation is capable of doing the job properly, taking into account your relationship with them and your needs. The judge also has to be satisfied they’ll act in your best interests and that there’s unlikely to be any conflict of interest between you. The judge will also try to find out, as far as this is practical, who you want to be appointed.

If you’re being cared for in a rest home or other institution, the person in charge of that place can’t be your property manager.

About property managers: Someone to make property decisions for you

What is a property manager?

Protection of Personal and Property Rights Act 1988, s 31

A property manager is a person or trustee corporation appointed for you by the Family Court to manage some or all of your money and property, when you’ve partly or completely lost the ability to manage them yourself.

What powers does my property manager have?

Protection of Personal and Property Rights Act 1988, s 38, Schedule 1

Your property manager is given a range of specific powers by the Family Court judge. These usually include:

  • managing your money and bank accounts
  • paying your bills, such as power and phone bills
  • making sure your tax returns are filed with IRD when necessary
  • buying or selling property as appropriate, but only if the property is not worth more than $120,000 (to buy or sell property over that amount, they need to get the Family Court’s permission)
  • managing any business you may own
  • renting out any house or flat you may have, as necessary.

What are my property manager’s responsibilities?

Protection of Personal and Property Rights Act 1988, ss 36, 43

The property manager must always use your property to promote and protect your welfare and best interests.

They have to consult with you, and encourage you to use and develop whatever capacity you have to manage your property affairs yourself. For that purpose they can allow you to have control over particular parts of your property – a particular bank account for example.

As far as is practical, your property manager also has to consult with other people who are involved with your welfare and can give competent advice on property affairs, like family members and service providers. They also have to consult with any welfare guardian the Family Court has appointed for you.

Safeguards against property managers misusing their powers

Protection of Personal and Property Rights Act 1988, ss 38, 42, 45, 46, 49, 50, 87–89, Schedule 1

The following things help prevent a property manager misusing their position:

  • Limits set by the judge – The property manager has only the powers specifically given to them by the judge. Their powers are also limited by the terms of any personal order that the Family Court has also made for you (see above, “Personal orders and welfare guardians: Decisions about your care and welfare”).
  • Reporting to the Family Court – The manager must report in writing to the Family Court about the property they’re managing. The first report is due three months after they’re appointed, and after they must report every year. The Family Court gets the Public Trust or an accountant to examine these reports.
  • Reviews by Family Court – You can ask a Family Court judge at any time to review the order appointing your property manager, and in any case, it has to be reviewed within three years (and if the judge then renews the order, it has to be reviewed within five years after that). You can also ask the Family Court to review specific decisions that the property manager has made. As a result of a review, the judge can decide to replace a property manager who the judge thinks hasn’t done a satisfactory job.
  • Responsibility for misusing powers – A property manager can be held personally responsible for things they do as your property manager if they act in bad faith or without reasonable care. They will also be personally responsible for contracts or other arrangements they enter into (for example, a mortgage) if they didn’t tell the other person that they were doing this as your property manager.
  • No payments – Property managers aren’t paid, so there’s no financial motive for them to get themselves appointed. (However, they are allowed to get back their reasonable expenses out of your money or property.)

How long are property managers appointed for?

Protection of Personal and Property Rights Act 1988, s 34

The property order and your property manager’s powers come to an end if:

  • the Family Court cancels the property order or appoints someone else as property manager, or
  • your property manager goes bankrupt or loses their own mental capacity, or
  • you die (in other words the property manager has no ongoing power to deal with your estate (your property) after you die).

A trustee company may be acting as your property manager because you (or a relative or doctor) applied directly to that company rather than to the Family Court (see above, “Asking a trustee company to be property manager: An alternative to going to court”). In that case you can bring their role to an end simply by giving them a written notice stating this.

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