"When a donor gives Power of Attorney to an individual, does this mean that the attorney can cancel financial documents that the donor may have in their name?"

Under New Zealand law, a general Power of Attorney from a donor in favour of a nominated attorney, can be either:

(i) unrestricted, or

(ii) limited, to apply to only certain transactions or circumstances.

In either situation, the attorney is required by law to follow the instructions of the donor and to act in the best interests of the donor at all times.

To not do so by, for example, cancelling some form of financial arrangement which favours the donor, could be seen to be a breach of this fiduciary duty, which can bring civil consequences against the attorney, through the court system.

Essentially, if the attorney either acts contrary to an absent donor's stated wishes, or in a way that financially benefits the attorney, then the attorney is in grave danger of being on the receiving end of civil litigation initiated by the donor.

Power of Attorney vs Enduring Power of Attorney
A general Power of Attorney is quite different to an Enduring Power of Attorney under the Protection of Personal and Property Rights Act 1988, as these powers of attorney "endure" beyond a donor's subsequent mental incapacity, whereas general powers of attorney are automatically revoked on this occurring."

If you have any concerns or questions regarding the above documents, please do not hesitate to contact us.

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