Many legal minds making NZ LAW work

We are an association of independent legal practices, proactively sharing ideas and expertise for the benefit of our clients.

When Grandma comes to live with us

Published: 26th February 2018

Author: Chris Kelly, Greg Kelly Law Ltd

Published in: Trust e.Speaking | Issue 26

As parents age, their children often find they need to take an increasing role in looking after them. Unpalatable as it seems, it’s important to think about the legal difficulties that can arise where one member of the family has assumed responsibility.

If questions are asked some time later, it may not be enough to say “but that is what mum/dad wanted”. We also explain the restrictions on when an attorney (the person who holds the Enduring Power of Attorney) can benefit from the decisions they make. We touch on the issues where a parent later needs to go into care.

Often elderly people do not want to live alone. Buying a unit in a retirement village, or some other form of sheltered accommodation, may be a good option. Others may find buying a unit is not financially possible or desirable. Some prefer to stay with one of the family. In that case, an increasing burden may be thrown on the family member who is providing care. These arrangements should be recorded carefully and it’s important to get legal advice.

Often the son or daughter who is providing care may also hold an Enduring Power of Attorney (EPA). In 2016, the Court of Appeal heard the Vernon case[1]. This concerned an elderly man who went to live with his son and daughter-in-law. In less than two years, almost all of his money had been paid out for the benefit of the son and his family. The son said this was done with his father’s approval, but the court wasn’t convinced. The court believed he had misused his position as carer – and as attorney under the EPA – for his own benefit. The son was required to pay back the money he had received and to meet some of the court costs.

In some cases, the parent may lend money to their son or daughter to help fund adding an extra room where the parent will be able to live. In other cases, a parent may pay for a relocatable unit or granny flat. Unless there is some other arrangement, the extra room or building will legally be the property of the son or daughter and their spouse/partner as owners of the land. If this is not intended, then a written agreement should be signed. There are a number of things to think about. What is to happen when the arrangement comes to an end? Is the money to be treated as a gift or a loan? When should any loan be repaid and is interest to be paid?

Parents may also need to think about whether it’s fair to help one son or daughter by paying for an extension to their home without giving something similar to others in the family.

What is to happen if, after a few months, the arrangement with Grandma is not working out? Can mum get her money back and move somewhere else? Will the son or daughter be able to pay her back if the money has all been spent on extensions to their home in order to accommodate mum?

More importantly, the son or daughter needs to be able to show that the arrangement is fair and that the parent is not being taken advantage of. To avoid these risks, it is advisable for the parent to have independent legal advice and for the arrangements to be clearly documented.

Long-term residential care

If a parent later needs to go into care, there may be a further difficulty. Government subsidies for long-term care are subject to asset testing. Money previously given away can be clawed back and treated as if mum or dad still had the money. There are exemptions, and you can hold on to some funds, but those rules change from time to time.

If mum has given her son money to pay for a granny flat or extension to his house, so she can live with him, this may be treated as ‘deprivation of assets’ and a residential care subsidy refused. If the money was a loan, not a gift, then the son would be expected to pay it back so that the money can be used to meet the cost of care.

EPA attorneys who benefit from their own decisions

Family members who act as an attorney under an EPA also need to understand that they are not entitled to benefit personally. Section 107 of the Protection of Personal and Property Rights Act 1988 says that an attorney can only benefit personally if:

  • The EPA specifically allows this
  • The court authorises the attorney to receive a benefit
  • The attorney is recovering out-of-pocket expenses
  • The attorney is the spouse or partner and is dealing with their jointly owned property
  • The attorney makes a loan or investment which a trustee would be able to make when looking after trust money, or
  • The attorney is a professional, such as a lawyer or accountant, and charges the usual professional fees for such professional work.

The wording of the EPA can override any of these last four exceptions.

If you have one of your parents coming to live with you, it would be wise to check what their EPA does and doesn’t allow. As well it would be prudent to ensure that any financial arrangements are well thought through.


[1]    Vernon v Public Trust [2016] NZCA 398

 

Related Articles

  • Auckland
  • Bay of Plenty
  • Canterbury
  • Coromandel
  • Gisborne
  • Hawke's Bay
  • Kapiti Coast
  • Manawatu - Wanganui
  • Marlborough
  • Nelson
  • Northland
  • Otago
  • Southland
  • Taranaki
  • Waikato
  • Wairarapa
  • Wellington
  • West Coast

Duncan King Law

Led by the firm’s director Kristine King, and John Ray who operates in a consultancy role, the dedicated team represents some of the most talented lawyers and legal executives in Auckland.

Although their primary focus is on Property, Commercial and Trust law the wide skillset of their team, and their vast experience in almost every aspect of the law, means they are uniquely qualified to provide advice to their varied clientele, regardless of what their legal requirements may be.

Region: Auckland

Phone: 09 623 0515

Kaimai Law Limited

Kaimai Law Bethlehem has been based in Bethlehem, Tauranga for nearly a decade, and our new office at The Lakes opened in March 2017.  The majority of lawyers in our professional team at Kaimai Law Bethlehem & Kaimai Law The Lakes has 10 to 30+ years of experience in their respective fields, which means that they have the knowledge required to give you legal advice you can trust. 

Kaimai Law Bethlehem & Kaimai Law The Lakes specialise in all property matters including conveyancing, finance and subdivisions, as well as family law, commercial law, estate planning, estate administration, trusts, wills, employment law and relationship property. Kaimai Law Bethlehem & The Lakes are your one stop law shops in Tauranga.

Region: Bay of Plenty

Phone: 07 579 3316

Corcoran French

Corcoran French is a firm of Christchurch and North Canterbury lawyers with over 120 years experience in providing legal services to Christchurch and the wider Canterbury region. We have offices in Christchurch City and Kaiapoi. We can also meet you at shared offices at Akaroa.

We welcome new clients and are committed to building strong long-term relationships that are rewarding for our clients.

Region: Canterbury

Phone: 03 379 4660

Purnell Jenkison Oliver

There is nothing as inevitable as change. Since opening for business early last century, we at Purnell Jenkison Oliver have seen many changes both in name and in the people who have made up the members of our team. We have been privileged to have served the public throughout all of these times. 

We are confident that we will continue to bring top quality legal services to our clients well into the future.

Region: Coromandel

Phone: 07 868 8680

Woodward Chrisp Lawyers

At Woodward Chrisp we strive to meet the needs of our clients by providing a wide range of high quality legal services within a supportive and collaborative environment.

Woodward Chrisp is the amalgamation of two long established Gisborne legal firms: Woodward Iles & Co and Chrisp and Chrisp. Today’s partners are Ross Revington, Adam Simperingham and Jeff Allen.

Region: Gisborne

Phone: 06 869 0900

NZ LAW Limited

NZ LAW Limited is an association of independent legal practices with member firms located throughout New Zealand. There are currently 57 member firms practising in a wide range of legal disciplines ranging from business law, home buying and selling, immigration law and intellectual property to aviation law and viticulture.

The group was established in 1992 when about five law firms met in Auckland to find a way to benefit their clients by replicating the conviviality and the sharing of ideas and expertise that occurs in larger law firms, but still be able to retain client confidentiality and their own independence.

Region: Hawke's Bay

Phone: 06 835 5299

Breaden McCardle Lawyers

Breaden McCardle Lawyers is the largest full service legal practice in the Kapiti Region.

We are here to help you and pride ourselves on providing practical, solutions based advice to clients in an approachable and straightforward manner.

Region: Kapiti Coast

Phone: 04 296 1105

CS Law

Looking after you, your family, and the small print.

Region: Manawatu - Wanganui

Phone: 06 368 9239

Wain & Naysmith

Based in Blenheim, Wain & Naysmith Lawyers is a full service law firm, and a powerhouse for property, family and business law.

We pride ourselves in providing clear and cost effective legal solutions and practical advice for you, your family and your business.

Region: Marlborough

Phone: 03 520 6103

Knapps Lawyers

As a firm, we promise to look after you and treat you in a manner that we would expect to be treated by a professional services provider; we promise to use every available legal remedy available to us to resolve your issue and to do what you ask us to do in a timely manner.

We will hold in strict confidence all information that we acquire through our work for you and which concerns your business or personal information.  The only exceptions are where you authorise us to disclose such information or where we must do so by law.

Region: Nelson

Phone: 03 544 7888

Thomson Wilson

Thomson Wilson is a full service law firm based in Whangarei. We’ve been trusted lawyers for the Northland community and beyond for 75 years.

We act for individuals and families, businesses, public sector and other organisations. Whether you need no-fuss advice on a simple matter, or a team of legal experts. 

Our staff provide advice in most areas of the law, including property law, business law, trusts and estates, separation and divorce, resource management, criminal law and more.

We also offer expertise in specialist areas such as Maori land, local government law, farming and forestry.

Region: Northland

Phone: 09 430 4380

Wilkinson Rodgers Lawyers

Our specialists work together to provide clients with the full range of advice they need to achieve their desired results. If you're looking for specialist knowledge and advice, are a company or individual we can help you by making it easier for you to achieve your objectives.

Our area of expertise include, but not limited to;

  • Commercial
  • Community
  • Family Law
  • Home, Asset & Employment
  • Wills & Estates

Region: Otago

Phone: 03 477 9844

Cruickshank Pryde

We are proud to provide a full suite of legal services to the regions of Southland and Central Otago. With our offices, located in Invercargill, Gore and Queenstown, equipped with the latest modern technology, we can service wider New Zealand and international clients with ease. Our areas of expertise include commercial, rural, business, employment, family, criminal, property, resource management and estate planning law.

Region: Southland

Phone: 03 214 4069

RMY Legal

Having been a cornerstone in the New Plymouth and Taranaki legal community since the 1930s we offer in-depth knowledge coupled with legal expertise and always put the needs of you and your business at the heart of what we do.

Not only do we offer a first class service to clients throughout Taranaki, we are passionate about what we do and our success stems from delivering advice in clear and understandable terms.

Region: Taranaki

Phone: 06 769 8080

Norris Ward McKinnon

We are the Waikato’s leading provider of specialist legal services with a national and international perspective.

We provide tailored legal advice to meet the diverse needs of large and small corporates, public institutions, small and medium businesses, individuals and families.

We know that choosing a law firm is not an easy task. We work with our clients to listen, reassure, and resolve their problems simply and cost effectively. From our experience, the best way to do this is through developing understanding and long-term relationships with our clients. Our team of lawyers are highly regarded with a depth of experience that gives them the credibility that underpins Norris Ward McKinnon’s solid reputation in the legal market. Put simply, they are real people dealing with the real issues that affect our clients day-to-day.

Region: Waikato

Phone: 07 834 6000

Gawith Burridge

Gawith Burridge traces its history back to 1875 when Charles Gawith first set up his practice. Since then the firm has undergone many changes, including a merger between Gawith & Co and Burridge & Co in 1998 to form our current practice.

Our firm draws on the breadth of expertise available from some of the region’s most senior legal practitioners, as well as the skills of those who have moved here from larger corporate environments.

As a result, we provide clients with a comprehensive range of legal services right here in the Wairarapa. We can provide you with legal assistance whether you are an individual or a company, with everything from setting up a Will to selling your farming business. 

Region: Wairarapa

Phone: 06 370 0000

Gillespie Young Watson

We specialise in Property, Commercial and Trust Law. When it comes to law firm size we are bigger than smaller and smaller than big. By limiting the work we do to our specialist areas, we like to think we bring together the best of big firm skill sets with the personal care, attention and relationships of small firms.

We expect our clients to receive clear, practical and timely advice. We place a premium on accessibility and convenience to our clients. We value and appreciate all of our clients and want to do the best possible job for each of them. When we close a file we want the client to feel they have received exceptional advice, service and value.

Region: Wellington

Phone: 04 569 3997

Hannan & Seddon

The Law Firm of Hannan & Seddon dates back to September 1867.

The firm's offices were in Werita Street from 1867 until 1982 when the firm moved to Tarapuhi Street and then to its current spacious premises at 61 Guinness Street in 1998.

The name Hannan comes from Mr Michael Hannan whose son John Hannan (Jack) joined the firm in 1908. Jack Hannan remained in partnership until he passed away in 1974 at the age of 90!

The name Seddon comes from Mr T E Y Seddon (son of Premier Richard John Seddon from Kumara) who joined the firm in the 1920's. The other prominent Solicitor at Hannan & Seddon was Cyril McGinley who joined the firm in the late 1920’s and retired as a Consultant in 1997 aged 87.

Currently we have two Partners within our firm. Tony Sullivan who has been with us for 29 years and Colin Smith, 26 years. The firm also has two long serving Legal Executives Elaine Knowles and Beverley Walsh.  

Region: West Coast

Phone: 03 768 4169

All the information published on this website, or in any article herein is true and accurate to the best of the authors' knowledge. Information on this site should not be a substitute for legal advice. No liability is assumed by NZ LAW Limited, or individual NZ LAW member firms for losses suffered by any person or organisation relying directly or indirectly on information published on this site. Views expressed in any article are the views of the authors individually and do not necessarily reflect the view of NZ LAW or their member firms. Information appearing on this site may only be reproduced with prior approval from NZ LAW Limited Head Office, and credit being given to the source. © NZ LAW Limited