Losing mental capacity can be an expensive exercise if you don’t have your house in order. It can also be a stressful time for family and loved ones who are already trying to cope with your sudden loss of mental capacity.

If you have not taken the practical step of completing a durable power of attorney, then no one will be in a position to make decisions regarding your personal care and welfare, and your real and personal property will be frozen until such time as the court appoints someone to handle their business. The process is administered by the Family Court, which in New Zealand is part of the District Court.

Obtaining court orders can take a long time, particularly if family and loved ones do not agree on who should request the appointment. Also, regardless of whether the process is relatively seamless or not, it will take several months and cost many thousands of dollars.

To ensure that the subject person’s best interests are met, the court appoints a “subject person’s attorney” chosen from a panel of attorneys experienced in these matters. That person is paid from a consolidated fund. Their role is to interview the subject person, as well as those seeking appointment as welfare guardians and property managers to convince the court that the appointments are in the best interest of the subject person.

Over time, after a hearing is obtained and all affected parties are given an opportunity to be heard, the court will eventually make the orders. You can expect this to cost between $3,000 and $5,000. Although applicants are technically responsible for legal fees associated with the application, it is common for an order to be made that the fees be paid out of the assets of the subject person.

Probably the worst part is that the initial court order lasts for two years and then applicants have to do it all over and over again at three year intervals, incurring the same cost each time, usually at their own expense. It only stops when you regain mental capacity, which doesn’t happen that often, or when you die.

The real craziness of all this is that all the unnecessary exercise could have been avoided if only you had had the foresight to establish a durable power of attorney while you had the chance. The legal fees likely would have been a fraction of what the court process cost and you would have made the decision yourself. Those you love would also have saved themselves a tremendous amount of stress. What makes it even worse is that there are even viable options available online where you could have done it yourself and saved even more money than consulting a lawyer.

So if you don’t have durable powers of attorney, do yourself a favor and do something about it now while you can and before it’s too late.