Financial and legal planning

Enduring Powers of Attorney (EPAs)

An EPA appoints someone to make decisions for your parent if they lose mental capacity. There are two kinds, and almost everyone over 75 should have both:

• EPA for Property — manages financial decisions: bills, bank accounts, property, investments. Can take effect immediately or only on incapacity.
• EPA for Personal Care and Welfare — makes health and living decisions when the person no longer can. Only takes effect on incapacity.
• Cost: $250–$500 per EPA through a solicitor. The person setting up the EPA must get independent legal advice (the law requires it).
• Choosing attorneys: trustworthy, capable of the role, ideally living in NZ. Joint vs several appointments matter — discuss with the solicitor.

Wills

• Should be reviewed every 5–10 years and after major life events (death of spouse, sale of home, new grandchildren)
• Must be valid: signed and witnessed correctly. Old wills not updated after a remarriage can be invalid.
• Cost: $200–$600 for a standard will through a solicitor; cheaper online options exist but are riskier for complex estates
• Beforehand has a more detailed guide at beforehand.nz/legal

Advance directives and Advance Care Plans

Separate from the EPA — these record the person's wishes about medical treatment. See advance care planning.

Family trusts

Trusts were once routinely used to shelter assets from rest home subsidy means tests. The rules tightened, the gifting limits closed off the main path, and the Trusts Act 2019 increased compliance costs. They're still useful for some families (relationship property protection, blended families, protecting beneficiaries with poor money management) but they are no longer a slam-dunk asset-protection tool.

• Annual compliance costs (trustee fees, accounts, tax return): ~$1,500–$3,000+
• Existing trusts should be reviewed with a lawyer — many are out of date or non-compliant
• Gifting assets into a trust is still subject to the Residential Care Subsidy means test
• Don't set up a trust without a clear non-tax purpose

Reverse mortgages and home equity release

A reverse mortgage lets an older homeowner borrow against their home with no repayments while they live there. The loan compounds and is repaid when the home is sold. Useful when income is tight but home equity is large.

• Main NZ providers: Heartland Bank Lifetime Loan, SBS Bank Lifetime Loan
• Minimum age typically 60+; lend ratio increases with age
• Negative-equity guarantee — the debt cannot exceed the home's sale value at exit (a key consumer protection)
• Interest rates higher than standard mortgages and the loan compounds — debt grows quickly
• May affect Residential Care Subsidy eligibility — get specific advice
• Reduces the inheritance left to children — discuss openly before signing

Annuities and lifetime income products

Lifetime income products (e.g. Lifetime Retirement Income, NZ Funds) convert a lump sum into guaranteed monthly income for life. Useful for people who worry about outliving savings. Trade-off: capital is locked up. Limited NZ market — get independent financial advice.

Insurance over 65

• Health insurance — Southern Cross and other premiums rise sharply after 65. Many older people drop coverage right when they need it. Consider whether public-system access plus targeted private cover (e.g. specialist consults) makes more sense than full insurance.
• Travel insurance — over-65 policies are more expensive and exclude pre-existing conditions in unpredictable ways. Read the PDS carefully. Disclose every condition or claims will be denied.
• Life insurance — usually not renewable past 75–80. Existing policies should be reviewed for whether they still serve a purpose.
• Funeral insurance — frequently poor value. People can pay in more than the policy ever pays out. A separate savings account is usually better.

Free and low-cost financial advice

• Sorted — government-funded financial guidance (free)
• Te Ara Ahunga Ora — Retirement Commission — retirement planning, retirement villages, money guides
• MoneyTalks — free financial mentor service: 0800 345 123
• Community Law — free legal help for low-income people: communitylaw.org.nz
• Authorised Financial Advisers — paid; ask up-front whether they earn commissions on what they sell you