What Does The New Legislation Cover?
On September 1, 2011, British Columbia’s Adult Guardianship and Planning Statutes Amendment Act, 2007 (The amended Adult Guardianship Act may be viewed here and the Abuse and Neglect Regulation here.) came into force, amending a number of other statutes, including, most significantly, the Power of Attorney Act (POAA), Representation Agreement Act and Health Care (Consent) and Care Facility (Admissions) Act. (New regulations that accompany these three Acts are Power of Attorney Regulation, Representation Agreement Regulation and Health Care Consent Regulation.) The aim of these amendments is to better protect an incapable adult from financial abuse as well as to provide a more comprehensive regime for managing and structuring an incapable adult’s affairs.
What does this mean for you? Whether you are preparing your power of attorney or representation agreement to deal with your own possible incapacity or you have agreed to act as attorney or representative, this new legislation will affect you. It changes a number of aspects about powers of attorney and it also provides more options for planning for your incapacity from a health care perspective.
How These Changes Will Affect You
In regards to the form and content of powers of attorney, some significant changes involve the following.
Capacity of the adult The common-law test of the capacity of an adult to enter into a power of attorney is now enunciated in the POAA. As the adult, you must understand the following:
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The amount of property you own and its value.
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The obligations, if any, that you have to your dependents.
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Your attorney may do anything in your name in respect of your financial affairs that you would do if you were able, subject to any restrictions that you put in place.
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Your attorney may misuse the authority granted to him or her.
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You may revoke your power of attorney.
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The value of your property may decline unless the attorney manages your property prudently.
Compensation An attorney may no longer be compensated for acting as an attorney unless the right to compensation, and the scheme for how compensation is to be determined, is set forth directly in the power of attorney.
Springing powers of attorney The legislation now also specifically sets out the right to create a springing power of attorney. This type of power of attorney outlines the circumstances when the authority of an attorney begins (e.g. in the event of an adult’s incapability), rather than arising as and from the date the agreement is executed by both parties.
Obligations Under Power of Attorney Now Enunciated in New Law
However, it is the duties and powers of the attorney under an enduring power of attorney (where an attorney can act on your behalf when you are incapable of doing so), that should be noted. The duties owing by an attorney to an incapacitated adult are now enunciated in the POAA and include:
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the duty to act honestly and in good faith
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to exercise the care, diligence and skill of a reasonably prudent person
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to act within the authority given in the enduring power of attorney
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to keep and produce prescribed financial records for inspection and copying at the request of the adult.
Of these duties, it is the new duty of an attorney to keep and produce financial records which is of import to those acting as attorneys or to a person’s decision about who to appoint as an attorney. Depending on when the authority of the attorney takes effect, this obligation will create documentation requirements for an attorney which arise immediately (by virtue of exercising authority under a power-of-attorney agreement) or later (when the attorney first exercises authority over an adult’s property).
This duty contains some specific (and significant) responsibilities. An attorney must now make reasonable efforts to determine the status of an adult's property and liabilities and in this respect must keep and produce a current list of the adult's property, liabilities, accounts and other records respecting the exercise of the attorney's authority under the power of attorney. In addition, the attorney must preserve all invoices, bank statements and other records necessary to create full accounts respecting the receipt or disbursement of capital or income.
Other significant duties include:
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to give priority, when managing the adult's financial affairs, to the personal and health care needs of the adult
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unless the power of attorney states otherwise, to invest the adult's property only in accordance with the British Columbia Trustee Act
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to encourage the adult's independence and involvement in any decision-making that affects the adult
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not to dispose of property that is subject to a specific gift in the adult's will (except if such disposition is necessary for the attorney to perform his duties)
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to keep the adult's personal effects at the disposal of the adult.
Consequently, an attorney must work closely with the adult, and be aware of not only the adult’s financial position and assets/liabilities but also have familiarity with his or her estate and future health care planning.
Existing Powers of Attorney Stay Valid But . . .
It is important to note that any power of attorney signed before September 1, 2011 is grandfathered under the amended legislation. Even if the form of your power of attorney no longer meets the requirements of the POAA, it remains valid. Nonetheless, the duties imposed on attornies will apply—for example, your attorney will be obliged to adhere to the financial records-keeping requirements. Ultimately, it may be worthwhile to consider whether it would be appropriate to update and redo your power of attorney to ensure that it accords with your incapacity plan.
Advanced Health Care Directives Are Now Binding
Regarding the Representation Agreement Act and the Health Care (Consent) and Care Facility (Admissions) Act, one of the more significant amendments is the enhanced ability of adults to draw up advance directives about their health care. Prior to September 1, 2011, your instructions about how you wished to be treated in certain situations (such as treatment while on life support) were not binding—they were merely regarded as an expression of your wishes that a health care provider was not bound to follow.
Now, you have the option to prepare an advance directive that allows you to predetermine what health care or treatment you wish to have (or not have) at a later time when you can no longer give instructions. Nonetheless, your wishes cannot be contrary to law.
As with powers of attorney signed before September 1, 2011, representation agreements that were signed before that date are also grandfathered in under the amended legislation. However, if you have not yet prepared an advance health care directive, it may be useful to consider reviewing and updating your representation agreement/future health care plan by preparing an advance directive.
For more information on incapacity planning, and estate planning generally, please contact
Alana Dale-Johnson.................................adale-johnson@singleton.com