An Enduring Power of Attorney is a legal document that appoints someone to manage financial affairs on your behalf. Power of Attorney is an important part of Wills & Estates Law. In a Power of Attorney, you are the “donor” and the person you appoint is the “attorney.” You can appoint more than one person or only one person with one or more alternates.
The Power of Attorney becomes effective on the date it’s signed by you and at least one of your attorneys and remains in effect if you become incapacitated. An attorney acting on your behalf can pay your bills, manage your bank accounts and investments, and deal with real and personal property. The attorney must keep your property separate from their own property.
The Power of Attorney Act in B.C. sets out the duties of an attorney under section 19 and the attorney’s powers under section 20 and in particular states at 19(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.”
The needs of the donor are paramount and whenever possible, the attorney should involve the donor in decision-making.
Section 20(1) of the Power of Attorney Act states that “an attorney may make a gift or loan, or charitable gift, from the adult’s property if the enduring power of attorney permits the attorney to do so or if (a) the adult will have sufficient property remaining to meet the personal care and health care needs of the adult and the adult’s dependents, and to satisfy the adult’s other legal obligations, if any, (b) the adult, when capable, made gifts or loans, or charitable gifts, of that nature, and (c) the total value of all gifts, loans and charitable gifts in a year is equal to or less than a prescribed value.”
If you are no longer capable of managing your own affairs, the prescribed amount under the Power of Attorney Regulation in any given year is no more than 10% of your taxable income from the previous year or $5,000, whichever is less. This regulation helps guide your attorney while protecting your best interests.
FAQ
1) Who can make a power of attorney in B.C.?
Any person who is 19 or older and has the mental capacity to understand the nature and effect of the document. This means the person must be able to comprehend what it means to give someone else the authority to manage their affairs.
2) What if the person is mentally incapacitated, for example, has dementia?
To create a valid POA the donor must be able to understand what they are signing, meaning they must have the mental capacity to comprehend the document’s effects and implications. If dementia has progressed to a point where the person can no longer understand this, they cannot create a new Power of Attorney. Sometimes a physician’s assessment may be necessary to determine capacity.
3) Who should I appoint as my attorney?
The person you appoint should be highly trustworthy. They will have the power to make important decisions on your behalf, potentially affecting your finances, property, and wellbeing. It’s important that you fully trust them to act in your best interest and handle your affairs responsibly. This may be a spouse, child, parent, other family member, or a trusted friend.
For more information regarding Powers of Attorney and to book a consultation, please call Deborah Todd Law at 250-590-6226 or use our contact page.
