6 August 2026

Who’s in control if you’re not? Planning for incapacity.

Most people plan for what happens when they die.  Far fewer consider what happens if they are still alive but unable to make decisions.

Losing capacity, whether through accident, illness, or cognitive decline, creates an immediate gap between who should be making decisions, and who is legally able to do so.  For individuals with significant assets, business interests, or complex structures, that gap can have real financial and personal consequences.

No automatic authority

A common assumption is that a spouse or family member can simply step in.  In New Zealand, that is often not the case.

If you lose the ability to make or communicate decisions, the impact extends beyond medical care to:

• personal finances and banking
• investment and asset management
• trust governance and control
• business decision-making
• day-to-day contractual matters

Without prior authority, decisions cannot be made on your behalf.  The usual pathway is an application to the Family Court of New Zealand to appoint someone to act.  That process takes time, involves cost, and removes your ability to choose who is in control.

For business owners, the position can be more acute.  Depending on the structure:

• directors may be unable to act where your involvement is required
• shareholdings can effectively be frozen
• banking mandates or funding arrangements may be disrupted
• co-owners and stakeholders can be left in uncertainty

Even short delays can impact operations, governance, and commercial relationships.

The primary tool: Enduring Powers of Attorney

Enduring Powers of Attorney (EPAs) are the central mechanism for managing incapacity risk.

There are two types of EPAs:

• Property: This covers financial matters, banking, investments, property, and in some cases, business interests. It can be structured to take effect immediately, or upon loss of capacity.
• Personal care and welfare: This covers decisions about medical treatment, living arrangements, and care. It only becomes effective once capacity is lost.

Well-structured EPAs allow you to nominate decision-makers and define how authority is exercised.  In practice, issues tend to arise where EPAs are too limited, impractical to operate, or not aligned with how assets and responsibilities are actually structured.

Aligning trusts and business structures

Trusts and other asset-holding structures can assist with continuity, but they do not remove the need for planning.

If you are a trustee or hold key powers, your loss of capacity can still disrupt decision-making unless succession and control mechanisms are clear.  The same applies to companies and investment structures—each may function well individually, but without coordination, gaps can emerge at the point decisions are most needed.

Where issues arise

Incapacity issues are usually not complex in isolation.  More often, they stem from gaps between otherwise sensible arrangements.  Common examples include:

• no EPAs in place, requiring urgent court intervention
• attorneys who are unavailable, unsuitable, or in conflict
• unclear decision-making processes across multiple parties
• trust or governance documents that do not deal effectively with incapacity
• key assets held personally, with no one able to access them

When to review

Capacity planning should be revisited as circumstances change, particularly where there are:

• significant asset acquisitions or disposals
• new or restructured trusts
• changes in relationship or family dynamics
• business ownership or governance changes
• new trustees, directors, or advisors

For clients with growing or more complex asset bases, periodic review becomes increasingly important.

Next steps

Effective incapacity planning requires your EPAs, business interests, and asset structures to work together in practice.

A useful way to assess your current position is to consider:

• who could access and manage your finances if you could not
• who could make medical and care decisions
• whether your trust could continue operating without interruption
• who could make decisions affecting your business interests
• whether those people would have clear authority and guidance

If any of those answers are uncertain, there is likely a planning gap.

Our asset planning team regularly works with clients to review:

• whether EPAs are fit for purpose
• how trusts and business structures operate on loss of capacity
• how assets are held and controlled
• whether the right people are in the right roles

The aim is straightforward: ensuring that, if something unexpected happens, decisions can be made immediately, by the right people, without unnecessary delay or disruption.

Kaylee Bird is a Senior Solicitor in our Asset Planning Team and can be contacted on 07 808 6066.