Under the Family Court Rules 2002, an incapacitated person is defined as:

Incapacitated person means a person who, by reason of physical, intellectual, or mental impairment, whether temporary or permanent, is -

  • not capable of understanding the issues on which his or her decision would be required as a litigant conducting proceedings; or
  • unable to give sufficient instructions to issue, defend, or compromise proceedings

You can guard against the effects of incapacity, or manage the effects, by:

  • granting a power of attorney to someone whom you trust (not necessarily a lawyer), while you are well and before there is a need for someone to start making decisions on your behalf;
  • obtaining an order for protection of personal property from the High Court; and/or
  • obtaining welfare and guardianship orders from the High Court.

All of the above fall within the ambit of the Protection of Personal and Property Rights Act 1988.

An enduring power of attorney is an instrument that can be used to ensure that a donor's property or welfare is looked after in the event of his or her subsequent mental incapacity. This is not possible under a conventional power of attorney (irrevocable powers of attorney for value aside), under which the donee's powers are co-extensive with those of the donor.

If the donor of a conventional power of attorney becomes mentally incapable of managing his or her own affairs, the donee's power is rendered invalid. The prime characteristic of an enduring power of attorney is that it is not revoked by the donor's subsequent mental incapacity, but continues to have effect.

An enduring power of attorney may be created by donors who are incapable of managing their property, provided that they understand the nature and extent of the power.

You must be very careful if granting an enduring power of attorney. Such powers can be abused, and you must have complete faith in your attorney. The capacity for abuse is much reduced if you have placed the bulk of your assets into a trust, and you have independent trustees to whom the attorney must account.

Living Wills

So-called 'living wills' are another means to inform medical practitioners of your wishes using advance directives. Typically, advance directives mandate against use of extraordinary measures under conditions of mental disability such as treatment to prolong life.

Talk to Rennie Cox about protecting your position should you become incapacitated.

A property manager may be appointed for an incapacitated person by the High Court under the Protection of Personal and Property Rights Act 1988. The property manager must consult with the person whose property they are appointed to manage, and other people who can provide a useful perspective on what the incapacitated person might have wanted done with the property.

Note that a property order may be registered under the Deeds Registration Act 1908 as an instrument affecting the title to any land in which the person subject to the order has any estate or interest, whether legal or equitable.

A property order is deemed to be an instrument purporting to affect land under the Land Transfer Act 1952, and a memorial of the instrument may accordingly be entered upon the register of any land in respect of which the subject person is the registered proprietor of any estate or interest under the Act.

On an application for the exercise of a Court's jurisdiction, the Court may make an order appointing a welfare guardian for the person in respect of whom the application is made in relation to such aspect or aspects of the personal care and welfare of that person as the Court specifies. Before this is done, the Court must be satisfied that the person in respect of whom the application is made wholly lacks the capacity to make or to communicate decisions relating to any particular aspect or aspects of his or her personal care and welfare, and that the appointment of a welfare guardian is the only satisfactory way in which to ensure that appropriate decisions are made in that respect.

The first and paramount consideration of a welfare guardian must always be the promotion and protection of the welfare and best interests of the person for whom he or she is acting. A welfare guardian must at all times seek to encourage that person to develop and exercise such capacity as he or she has to understand the nature and to foresee the consequences of decisions relating to his or her personal care and welfare, and to communicate those decisions.