Power of Attorney and Representation Agreements
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This script discusses powers of attorney, enduring powers of attorney and representation agreements, starting with powers of attorney.
What is a power of attorney?
A power of attorney is a document that appoints another person, called an “attorney,” to deal with your business and property and to make financial and legal decisions for you. The word “attorney” here means “one who is appointed and authorized to act in the place of another person”.
BC has a new Power of Attorney Act
A new Power of Attorney Act came into effect in BC on September 1, 2011. It brought in many new changes relating to “enduring powers of attorney” (discussed later in this script). Powers of attorney signed before September 1, 2011 will generally still be valid, but since the new Power of Attorney Act brought in many changes, it’s a good idea to have a lawyer review your power(s) of attorney to ensure they are still valid and will do what you need them to do. Any powers of attorney signed on or after September 1, 2011 must follow all the new laws.
A power of attorney can be very specific
For example, you may give your daughter a power of attorney just to cash your old age security pension cheques for you. In fact, you can get power of attorney forms for cashing these cheques at your local federal Service Canada office. Your bank can also give you a form if you need a power of attorney for a specific bank account.
A power of attorney can also be very general
If you wish, you can give your attorney very wide powers to deal with all of your assets.
There are specific rules for powers of attorney dealing with real estate
The Land Title Act requires the attorney to do certain things and follow certain procedures, and there are certain rules that apply. For example, a power of attorney dealing with real estate is only valid for three years from the date of signing, unless otherwise specified, or unless it is an enduring power of attorney as described in the Power of Attorney Act, which has been filed in the Land Title registry in accordance with the Land Title Act. You can get a copy of the Land Title Act at your local library or find it on the government’s legislation website at www.bclaws.ca.
If you travel to the United States on a regular basis (Canadian “snow bird”), you may want to have a power of attorney. Because real estate involves large amounts of money, you should consult a lawyer for real estate transactions rather than doing it yourself.
Who should you appoint as your attorney?
Consider carefully who to appoint as your attorney and the powers you want to give. You cannot appoint anyone who is paid to provide you with personal or health care or who works at a facility through which you receive personal or health care, unless that person is your child, parent or spouse. It’s important that you trust the person’s honesty and judgment. If you have no family member or friend that you can or want to appoint, you can appoint a respected professional such as your lawyer, accountant or trust company. As a power of attorney gives your attorney very broad power, it can cause a lot of harm if misused.
Can you appoint more than one attorney?
You can appoint more than one person as your attorney, either in the same document or in different documents. If you appoint more than one attorney in the same document, the document should specify how the attorneys must act (for example, must act unanimously or by majority decision). If one or more attorney(s) is unable or unwilling to act, the remaining attorney(s) can continue to act. If you don’t want the remaining attorney(s) to be able to continue to act, you should specifically state this in the document(s).
Does the person you appoint have to act as your attorney?
No. Merely granting a power of attorney to someone (and even delivering the written document to them) doesn’t mean that this person has to act as your attorney if they don’t want to. The attorney doesn’t have to take any specific steps to say “no,” or to later decline to act if they no longer wish to be the attorney.
How do you end a power of attorney?
The most effective way to terminate a power of attorney is to give your attorney a written notice saying that their power has ended, and preferably also to destroy all originals or duplicates of the document (to prevent misuse by the terminated attorney). To cancel or revoke a power of attorney dealing with land, you must file a document called a “Notice of Revocation” in the Land Title Office where the land is registered. The court can also terminate a power of attorney – this might happen if your attorney abuses their power. It’s also possible to put an end-date, or include circumstances in which the power of attorney will end, in the document itself.
A power of attorney automatically ends in certain circumstances
A power of attorney automatically ends when you die or if you become bankrupt. It also ends if you become mentally incompetent, unless the power of attorney explicitly mentions that the power should continue after your having become incompetent. This is called an “enduring power of attorney”.
What is an enduring power of attorney?
An enduring power of attorney allows your attorney to make the necessary financial and legal decisions for you if you become mentally incapable because of age, accident or illness. To make a valid enduring power of attorney, the document must specify whether the attorney can exercise authority only while you are capable or only while you are incapable (or both). The document must also state that your attorney's authority will continue even if you’re no longer able to make decisions for yourself.
There are different rules for enduring powers of attorney than for non-enduring ones
For example, for enduring powers of attorney, if you appoint more than one attorney in different documents, the appointed attorneys must act together unanimously, unless the documents describe when the attorneys don’t have to act unanimously or set out how a conflict between the attorneys is to be resolved.
Also, if your attorney has signed the enduring power of attorney and the attorney no longer wishes to be the attorney, the attorney must give written notice of their resignation to you and any other attorneys named in the document. If you are mentally incapable at that time, the attorney must also give written notice of their resignation to your spouse, near relative or close friend.
How do you end an enduring power of attorney?
To terminate or change an enduring power of attorney, you must give written notice of the termination or change to your attorney(s). It’s also important to give written notice of the termination to any financial institutions or other third parties where your attorney may have previously used the enduring power of attorney to act on your behalf.
Also, the Power of Attorney Act sets out additional circumstances under which an enduring power of attorney automatically ends, such as:
- if the attorney becomes bankrupt
- if the attorney is your spouse (either married or common-law) and your marriage or marriage-like relationship ends, unless the document specifically says that the power of attorney will continue to be in effect if your marriage or marriage-like relationship ends
- if the attorney is a corporation and the corporation is dissolved or winded up
- if the attorney is convicted of an offence described in the Power of Attorney Act or an offence where you were the victim
There are specific new rules for signing an enduring power of attorney
An enduring power of attorney must be signed and dated by you in front of two adult witnesses at the same time (only one witness is needed if the witness is a lawyer or notary public). Neither your appointed attorney nor the spouse, child, parent or an employee/agent of the appointed attorney can act as a witness.
Also, before an appointed attorney can start to exercise any authority granted to them under an enduring power of attorney, the appointed person must sign and date the document in front of two witnesses (only one is required if the witness is a lawyer or notary public). The attorney doesn’t need to sign in front of you or any other appointed attorneys (if more than one attorney is appointed). But the same witness rules for your signing apply to the attorney's signing.
When is an enduring power of attorney useful?
An enduring power of attorney may help avoid having the court appoint a “committee” of one or more people to look after your legal and financial affairs in the event that you become mentally incompetent. A committee appointment is much more expensive than making an enduring power of attorney. See script 426 on “Committeeship” for more information on this.
What are the duties of an attorney under an enduring power of attorney?
Before a person agrees to act as an attorney under an enduring power of attorney, the person should be aware of the duties and obligations that they will have as an attorney. All of the duties and obligations are described in the Power of Attorney Act. These include the duty:
- to act honestly and in good faith
- to act in your best interests, taking into account your current wishes, known beliefs and values and any directions that are set out in the document
- to not dispose of any property that the attorney knows is specifically gifted in your Will
- to keep your assets separate from the attorney's assets
- to keep proper records, including creating and maintaining a list of your property and liabilities
What decisions can be delegated with a power of attorney?
A power of attorney is used to delegate financial and most legal decisions. This is true for both a power of attorney and an enduring power of attorney. But your attorney cannot make medical or health care decisions for you, such as consenting to surgery or dental work for you. For these decisions, you need to make what’s called a “representation agreement.” In the event that there is a conflict between your enduring power of attorney and your representation agreement, the provisions of your enduring power of attorney will prevail.
What is a representation agreement?
The Representation Agreement Act allows you to appoint someone as your legal representative to handle your financial, legal, personal care and health care decisions, if you’re unable to make them on your own.You cannot appoint any person who is paid to provide you with personal or health care or who is an employee of a facility through which you receive personal or health care, unless that person is your child, parent or spouse. The document is called a representation agreement and it creates a contract between you and your representative.
There are new changes to the Representation Agreement Act
Changes to BC’s Representation Agreement Act came into effect on September 1, 2011. Representation agreements signed before then will generally still be valid. But any representation agreements signed on or after September 1, 2011 must follow all the new laws.
Your representative has certain duties they must follow
Before a person agrees to act as a representative, that person should review and be aware of the duties and obligations that they will have as a representative. For example, your representative must consult with you, as much as is reasonable, to determine your wishes. Some of the other duties of representatives include the duty:
- to act honestly and in good faith
- to take into account your current wishes, and if you’re unable to express your wishes at that time, to take into account any wishes or instructions you may have given while you were capable of doing so
- to act within the authority granted by the representation agreement
- to keep your assets separate from the representative's assets
- to keep proper records including creating and maintaining a list of your property and liabilities
The agreement should name a monitor
Generally speaking, unless your representative is your spouse, the representation agreement must name another person as a “monitor” to help ensure that the representative lives up to his or her duties. Otherwise, the agreement must state that a monitor isn’t required.
Are there different types of representation agreements?
There are two types, both dealt with in the Power of Attorney Act:
- Section 7 of the Act deals with "limited agreements" – these cover straightforward, everyday decisions.
- Section 9 of the Act deals with "general agreements" – these deal with complex personal care and health care matters.
A general agreement is needed for your representative to make such decisions as refusing life support if you become terminally ill.
There are strict rules for signing a representation agreement
Two witnesses are needed when you sign a representation agreement (unless one of the witnesses is a lawyer, in which case you only need the signature of that lawyer witness). There are also certain restrictions on who can be a witness.
Do you need a lawyer to make a representation agreement?
The law doesn’t require you to consult a lawyer to make a representation agreement, but you should actually see a lawyer if you want to make an agreement. A lawyer can help you to understand the wide range of issues that arise with a representation agreement.
Can you register these documents somewhere?
At the Nidus Personal Planning Resource Centre & Registry, you can register both enduring powers of attorney and representation agreements. Hospitals, banks and government services can search there to find out who your attorney or representative is if they need to. See www.nidus.ca.
A power of attorney is a document that allows you to give another person, called the attorney, the authority to act for you in financial and legal matters. The power can be as specific or as general as you wish. But unless you use an enduring power of attorney, it will automatically end if you become mentally incompetent. A representation agreement, on the other hand, can cover personal care and health care decisions, as well as certain financial and legal decisions, if you’re unable to make them on your own.
Where can you find more information?
- The Public Guardian and Trustee of British Columbia has detailed information on powers of attorney, representation agreements and court orders appointing a committee to look after the affairs of a person who is mentally incapable. Their phone number is 604.660.4444 in Vancouver and their website is www.trustee.bc.ca.
- The Nidus Personal Planning Resource Centre & Registry provides detailed information on representation agreements. Their phone number is 604.408.7414, and their website is www.nidus.ca.
- See the provincial government’s website on incapacity planning and the forms that can be used at www.ag.gov.bc.ca/incapacity-planning.
- Refer to script 426 on “Committeeship”.
[updated March 2015]
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