Empowered by knowledge

TRUDE LABOSSIERE HUEBNER

It is never a pleasant activity to contemplate what happens if one becomes incapacitated. How do we prevent our families from becoming vulnerable? And how do we preserve our assets, assets which may be used to help pay for the cost of our care?

A properly drafted enduring power of attorney may save your family heartache in the event of incapacitation, either physical or mental. A power of attorney can be made by anyone, as long as they have legal capacity and are over the age of 18.

"When one assumes responsibility, such as children and/or marriage, or acquires assets, this is the time to give thought to taking those steps necessary to protect our families and our assets," said lawyer Richard Wenner in a telephone interview. Wenner heads the wills and estates section of the B.C. branch of the Canadian Bar Association.

In his law practice, explained Wenner, he too frequently sees the results of failing to prepare for disability. One common example is where a co-owner of the family home becomes incapacitated due to a stroke or dementia and the best care available is in an institution. This might require selling the family home to finance the cost of placing them in a decent facility. Even if the home is registered in joint tenancy, the healthy co-owner has no legal authority to sell the home in the absence of either an enduring power of attorney or a court order, which authorizes the healthy co-owner to sell the property. The process of obtaining the court order is called "committeeship." The usual cost is in the range of $5,000 and the process typically takes from three to six months.

However, the cost of obtaining an enduring power of attorney is about $250 and about half an hour in the lawyer's office. The power of attorney provides the family member or another trusted person ("the attorney") with the tools to provide for the financial needs of the disabled party when care is needed. The term "attorney" in this case does not refer to a lawyer, but to the person to whom the power is granted.

The power of attorney is merely an instrument to direct someone you trust to act upon your wishes, explained Wenner, and if you don't do it, someone else will. Wenner pointed out that once an application for committeeship is submitted to the court, the public guardian and trustee (whose role is to look after the needs of the disabled in British Columbia) will carefully review the application. If they have any concerns about the ability of the applicant to look after the financial needs of the patient, they will recommend to the court that the committeeship order not be granted unless the applicant posts a bond that is usually equal to the value of the patient's estate. This protects the incapacitated person and the estate. A bond is not required when making a power of attorney.

Wenner emphasized that this is all about personal choice. "As with most things in life, the more we plan, the less we leave to chance. Generally, most people are happier when they have some control over the decision-making process," said Wenner.

Here in British Columbia, there are two kinds of enduring powers of attorney that a lawyer can prepare. There are powers of attorney that take effect immediately and those which take effect upon the happening of some future event – such as disability – as may be determined by one's attending physician(s). The latter is referred to as a "springing" power of attorney: it "springs" into effect only upon the happening of a specified event.

Another form of power of attorney is a non-enduring, or a limited, power of attorney. One example is where a person grants to a son or daughter the authority to pay the parent's utility bills from the parent's chequing account. This power of attorney can be provided by the bank, but is not binding for any purpose other than simple transactions at that branch, and does not give power to sell real estate or dispose of assets.

A more encompassing power of attorney can only be drafted and witnessed by a lawyer or a notary. Otherwise, it will have not legal validity. Wenner pointed out that there is a serious risk to granting an enduring power of attorney to someone who you do not know or trust. A power of attorney is a very powerful document, he explained. It can be easily abused. The person to whom you grant the power could sell your home or take money out of your bank account without your knowledge or permission and leave you destitute. It must only be granted to someone you trust with your life, he stressed.

Acts and regulations regarding power of attorney vary from province to province and state to state. A power of attorney made in British Columbia will almost certainly not be valid in any other province or state. If you own vacation property or second homes outside of the province, you should be prudent and check with a lawyer in the province or state where that asset is located, regarding disposition of these properties if you become incapacitated.

A power of attorney is extinguished when the party who grants it dies. At any time, you may cancel the power of attorney or make a new one. After all, it is a legal instrument, which protects you and should reflect your situation and wishes throughout your life.

Trude LaBossiere Huebner is a Vancouver freelance writer. She also contributes legal chapters to Living a Healthy Life with Chronic Conditions Canadian editions.

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