Incapacity Planning Update: New Attorney Requirements
On September 1st, 2011, British Columbia introduced various amendments to its incapacity planning legislative regime causing practitioners across the province to revisit their incapacity practices. Enduring Powers of Attorney were significantly altered by way of amendment to the Power of Attorney Act. There are a number of significant changes that warrant detailed discussion, however this entry will limit its scope to those new responsibilities legislated for Attorneys appointed by the adult in an enduring power of attorney.
To comprehend the importance of an attorney’s duties, the nature of enduring powers of attorney must be considered. Enduring powers of attorney differ from general powers of attorney in that an enduring power of attorney remains effective upon the incapacity of the adult who granted the power of attorney. General powers of attorney are rendered void upon the incapacity of the adult. The mere fact that enduring powers of attorney require attorneys to act upon the incapacity of the adult places considerable pressure on the attorneys. Historically, there has been little guidance provided to the attorneys in respect of their duties and responsibilities. The revised Power of Attorney Act clearly outlines the attorney’s requirements to do away with the ambiguity of the past.
Unfortunately, it is not necessarily clear when an attorney’s duties arise. The common law provides that the duties only arise once the attorney is required to act in that role. The amendments muddy these waters and can be interpreted to require the attorney to act, and accordingly be subject to the legislated duties, upon the execution of the power of attorney. It will be necessary for the attorney to receive legal advice on this issue until the practice developments over time.
Once acting, the attorney must exercise those duties set out in section 19 of the Act, which reads as follows:
19 (1) An attorney must
(a) act honestly and in good faith,
(b) exercise the care, diligence and skill of a reasonably prudent person,
(c) act within the authority given in the enduring power of attorney and under any enactment, and
(d) keep prescribed records and produce the prescribed records for inspection and copying at the request of the adult.
(2) When managing and making decisions about the adult’s financial affairs, an attorney must act in the adult’s best interests, taking into account the adult’s current wishes,
known beliefs and values, and any directions to the attorney set out in the enduring power of attorney.
(3) An attorney must do all of the following:
(a) to the extent reasonable, give priority when managing the adult’s financial affairs to meeting the personal care and health care needs of the adult;
(b) unless the enduring power of attorney states otherwise, invest the adult’s property only in accordance with the Trustee Act;
(c) to the extent reasonable, foster the independence of the adult and encourage the adult’s involvement in any decision-making that affects the adult;
(d) not dispose of property that the attorney knows is subject to a specific testamentary gift in the adult’s will, except if the disposition is necessary to comply with the
attorney’s duties;
(e) to the extent reasonable, keep the adult’s personal effects at the disposal of the adult.
(4) An attorney must keep the adult’s property separate from his or her own property.
(5) Unless the enduring power of attorney states otherwise, subsection (4) does not apply to property that
(a) is jointly owned by the adult and the attorney as joint tenants or otherwise, or
(b) has been substituted for, or derived from, property described in paragraph (a).
Perhaps the most interesting duty is found in section 19(1)(d) which requires the Attorney to keep those records set out in the regulations as soon as the Attorney begins to Act. This is a new requirement that Attorneys must satisfy and can, in some cases, require careful planning. A lawyer should be consulted to ensure that you, as Attorney, are satisfying the requirements placed on you as Attorney.
