Planning for Incapacity: what steps you should take nowJul 26 2021
If the past 18 months has taught us anything, it’s that things can change quickly and we may have little control. The pandemic has shown the unpredictability of death and illness, which also underscores the importance of early planning.
Most people understand the importance of a will, but just as important are an enduring power of attorney (“EPOA”) and representation agreement (“RA”). Unfortunately, estate planning is often neglected until it is too late. If an adult loses capacity before executing an EPOA or RA, a committeeship application may be necessary and should be completed before it is urgent. We explain the basics of all three below.
What’s an Enduring Power of Attorney?
An EPOA is where an adult has appointed someone to make legal and financial decisions on their behalf. This authority must be used in the best interest of the adult and it remains in force after an adult has lost capacity. To appoint an EPOA, the adult must by aged 19+ and have capacity.
What’s a Representation Agreement?
A RA allows adults in BC to appoint someone to make health care and personal decisions on their behalf, with varying levels of authority. To appoint a representative, the adult also must be aged 19+ and have capacity.
The forms for appointing a representative and more information can be found here.
Generally speaking, a person has capacity to make an EPOA if they understand:
- What property they own and approximate values;
- Any obligations to dependents;
- The scope of powers being given to the attorney;
- That value may decline if the attorney is not prudent;
- That the attorney may misuse the authority; and
- The adult may revoke the EPOA if capable.
If an RA is limited to decisions for routine, daily care needs, the test for capacity is more limited. Basically, the adult must be capable of understanding the context or nature of a decision and appreciate the possible consequences.
While adults in BC are presumed to have capacity, it may be advisable to obtain a letter from your family physician confirming your ability to understand the above.
If your loved one loses capacity without appointing an EPOA and/or representative, there is legally no one who can make decisions on their behalf. The court may then need to appoint someone (a “Committee”) for decisions like selling a property, whether to get a medical procedure or where to live. It can be a family member, friend, trust company or the Public Guardian and Trustee who applies.
This court process generally involves six steps:
- Gather documents: the court should have a sense of your loved one’s assets and debts, and certain restrictions may be ordered (like sale proceeds from a property being invested).
- Prove you’re trustworthy: if named in the loved one’s will as executor, it’s likely your decision-making is trusted. If you have previously declared bankruptcy or have been convicted of something like fraud, the court may not trust you to manage the affairs of someone else.
- Explain why you: it’ll be helpful to outline the family dynamics and why you are able to make appropriate decisions.
- Arrange medical assessments: two different doctors will need to assess your loved-one and swear affidavits outlining their views as to capacity and prognosis for recovery.
- Create a care and asset plan: you’ll have to outline what you’re planning to do with your loved-one’s assets and how you plan to continue their care.
- Apply to Court: next of kin and the Public Guardian & Trustee will have an opportunity to review and respond to your application materials before it is heard by the court, and then the judge will make an order.
The sooner you look at getting a committeeship application underway the better as the process can take several months, particularly if there is a disagreement about who should apply or multiple applications.
CONTACT RDM LAWYERS
By taking the time today to prepare for future incapacity, you may save your loved ones the time and cost of navigating a committeeship application.
Questions about preparing an enduring power of attorney, representation agreement or a will? A member of our Wills & Estate Planning team will be happy to assist.
Need to apply for committeeship? We can help with that too. Contact our office at 604.853.0774 to set up a consult with a member of our Estate Litigation team today.