Vancouver Estate Litigation Lawyers Providing Advice on Powers of Attorney
A power of attorney is a document that gives a person (the “attorney”) power over the financial and legal matters of another person (the “donor”). Unlike committeeship, a power of attorney is created by the donor when they are mentally capable of making their own decisions and does not grant the ability to make personal or care decisions for the donor.
Meridian Law Group represents clients in matters involving powers of attorney, including disputes regarding attorney conduct. The firm’s experienced estate litigation lawyers have an established reputation for providing trusted advice and exceptional advocacy to protect clients’ rights and financial interests.
Types of Powers of Attorney
Powers of attorney are created pursuant to the Power of Attorney Act of British Columbia. They can be tailored the donor’s specific needs by setting limits on the attorney’s authority and obligations or the amount of time the power of attorney remains in effect.
There are two types of powers of attorney:
- General: A general power of attorney ends when and if the donor becomes mentally incapable of making their own decisions, becomes bankrupt, or dies.
- Enduring: An enduring power of attorney (“enduring POA”) remains in effect when the donor becomes mentally incompetent. For this reason, this type of power of attorney is often created in the context of a person’s estate or long-term financial plans. An enduring POA prevents the donor’s loved ones from applying to the court for committeeship if the donor loses the mental capacity to handle their finances.
Much of the Power of Attorney Act deals with enduring powers of attorney, given the attorney’s substantial long-term control over a vulnerable donor’s financial and legal affairs. Enduring POAs are commonly used within the context of a donor’s estate or long-term financial plans and prevent the need for their loved ones to apply to the court for committeeship if the donor loses mental capacity in the future.
Mental Capacity for Enduring Power of Attorney
Under the Power of Attorney Act, a donor can only make an enduring power of attorney if they are mentally capable of understanding its nature and consequences. A donor is deemed to be incapable of understanding the nature and consequences of the proposed enduring power of attorney if they are unable to understand any of the following:
- The property the donor has and its approximate value;
- The obligations the donor owes to their dependants;
- That aside from the making of a Will, the donor’s attorney will be able to do anything on the donor’s behalf regarding their financial affairs that the donor could do if they were capable, subject only to the restrictions set out in the enduring power of attorney;
- That the value of the donor’s business and property may decline if the attorney fails to manage them prudently;
- That the attorney might misuse their authority; and
- That the donor may revoke the enduring power of attorney if they are mentally capable of doing so.
Who Can Be an Attorney?
The following entities can be an attorney:
- An individual, except a person who is paid to take care of the donor or provide them with health services;
- The Public Guardian and Trustee; or
- A financial institution that is legally authorized to conduct trust business.
A donor can have one attorney or multiple co-attorneys. Attorneys are entitled to reimbursement from the donor’s property for reasonable expenses incurred in the exercise of their duties. An attorney may also be compensated for their efforts if the enduring power of attorney expressly authorizes the compensation and the payable rate.
Effective Date of an Enduring Power of Attorney
The terms of an enduring power of attorney can specify the date it is to come into effect. It may also state that it becomes effective upon the occurrence of a specific event, such as an illness or injury that leaves the donor incapable of managing their financial affairs. The enduring power of attorney should explain in detail how the event’s occurrence must be confirmed and what evidence is required (for example, what medical evidence is sufficient to demonstrate that the donor has become incapable of making financial decisions).
Absent a specified date or event, an enduring power of attorney comes into effect once signed by the donor and attorney.
Termination of an Enduring Power of Attorney
So long as the donor has the mental capacity to do so, they can change or revoke the enduring power of attorney. The terms of an enduring power of attorney may specify the circumstances in which the attorney’s powers are suspended or end.
Some events automatically revoke the attorney’s authority under the Power of Attorney Act, including the death or bankruptcy of the attorney or, where the attorney and donor are spouses, the end of their marriage. An enduring power of attorney is also terminated if the donor becomes the subject of a committee order under the Patients Property Act or if the donor dies.
Duties of an Attorney
The Power of Attorney Act sets out several legal duties that attorneys must follow. Attorneys must:
- Act honestly and in good faith;
- Exercise the care, diligence and skill of a reasonably prudent person;
- Act within the limits and conditions of their authority given under the enduring power of attorney;
- Keep records as prescribed by the law;
- Act in the donor’s best interests, considering the donor’s wishes, beliefs, and values, and in compliance with any directions set out in the enduring POA;
- Prioritize the donor’s personal and health care needs when managing the donor’s financial affairs, as much as is reasonable;
- Invest the donor’s property following the rules of the Trustee Act;
- Make reasonable efforts to foster the independence of the donor and include them in the decision-making process;
- Avoid disposing of any property that is the subject of a gift under the donor’s Will, unless necessary;
- Keep the donor’s personal effects accessible to the donor as much as possible; and
- Keep the donor’s property separate from the attorney’s property unless it is jointly owned by the donor and attorney.
Attorney Conduct & Accountability
Attorneys are generally shielded from liability for any exercise of their powers done in good faith under an enduring power of attorney. This applies even if the attorney inadvertently acts in violation of the terms of the enduring POA, so long as their conduct was otherwise lawful.
Investigation by the Public Guardian & Trustee
The Public Guardian and Trustee (“PGT”) is authorized to investigate allegations of an attorney’s abuse or neglect of the donor. This includes concerns of potential impropriety affecting the validity of the enduring power of attorney, such as fraud, undue pressure from the attorney on the donor, or the donor’s mental incapacity when the enduring POA was made.
Litigation Against Attorneys
Either the Public Guardian and Trustee or a person who reported potential abuse may apply to the court for a remedy under the Power of Attorney Act, including an order:
- Varying or terminating of all or part of the enduring POA;
- Declaring that the actions taken by the attorney are void or valid; or
- Requiring the attorney or other person to release information to the PGT or individual complainant. This information may be used to further an abuse investigation or determine the donor’s mental capacity when the enduring POA was made.
An experienced power of attorney litigation lawyer can also help concerned parties (including the donor) take swift legal action to protect the donor’s property. The court can provide relief from an unscrupulous attorney’s misappropriation of assets by making an order to trace financial and property transactions, recover stolen funds, or freeze assets until the dispute has been resolved.
Contact Meridian Law Group in Vancouver for Trusted Advice on Powers of Attorney
The seasoned estate litigators at Meridian Law Group provide trusted advice and skilled advocacy for clients in matters involving powers of attorney. The firm takes swift action to secure clients’ rights and provides pragmatic legal solutions to resolve disputes. Meridian Law Group helps clients on either side of a power of attorney matter, including attorneys facing litigation over the exercise of their authority or loved ones challenging an attorney’s conduct.
Since 1988, Meridian Law Group has been a cornerstone of the British Columbia legal community. The firm is prominently located in the Nelson Square Building in downtown Vancouver and assists clients throughout British Columbia, across Canada, and internationally. To schedule a confidential consultation with an experienced estate litigation lawyer, reach out online or call (604) 687-2277.