Written by Chris Alveberg, Partner
Do you know what would happen to your home, financial affairs and other property (e.g., your finances, real estate, business) in the event that you suddenly suffered an accident (whether at work or otherwise) or illness (e.g., stroke)? Who would manage your property and financial affairs? Nobody, not even a spouse, has automatic legal authority over an adult’s financial or legal affairs, even if you become incapable.
Unfortunately, most commonly these considerations only occur as people advance in years and experience family friends or acquaintances who lose their ability to manage their financial affairs or to care for themselves without aid. Because of the length of time and cost involved if you have not planned for incapacity, a review of the options available is essential at any age.
On September 1, 2011, changes to the Power of Attorney law came into effect in British Columbia. However, if your existing document was validly made under the previous provisions it should still be valid, as existing Powers of Attorney were grandfathered under the new provisions.
Even though pre-existing Powers of Attorney may still be valid, when your appointed Attorney acts as your Attorney they will be governed by the new provisions and will have different powers and limitations. If you do not want those particular changes then you may have to revoke your existing Power of Attorney and make a new one on different terms.
Some of the most important changes include a restriction on how your Attorney can invest your property unless the Power of Attorney specifically provides otherwise. In addition, your Attorney will not be able to be paid for their duties as attorney, unless your Power of Attorney specifies a rate or amount of compensation. If there is no mention of such compensation, your Attorney cannot be paid even if they are spending significant time year after year looking after your affairs.
If you want your Attorney to have the ability to delegate certain of their powers (for example, preparing your income tax returns) under the new provisions you must specifically state that your Attorney has to ability to delegate.
Finally, under the new provisions your Attorney may make gifts, loans and charitable donations that you would have made, but only up to a maximum of $5,000 and only if you will have sufficient property left over to meet your needs (and anyone you are supporting). As a result, if you want your Attorney to be able to make more generous gifts (including to immediate family members and certain charities) then you will have to specify that in a new Power of Attorney.
Since there were many changes to the Power of Attorney law, it is a good idea to have a lawyer review your existing Power(s) of Attorney to confirm that they are still valid and reflect your current instructions. You should also be aware that if you decide to change the people that you have appointed as your Attorney the new provisions require you to give written notice to each Attorney of the cancellation of the existing Power of Attorney.
But your Attorney cannot make medical or health care decisions for you. For these decisions, you will need to consider preparing a Representation Agreement. The Representation Agreement Act allows you to appoint someone as your legal representative to handle your personal care, medical and health care decisions if you are unable to make them on your own.
Written by Chris Alveberg, Partner