Enduring Powers of Attorney – An Ounce of Prevention is Worth a Pound of Cure

A power of attorney is a document that allows one to appoint someone else to manage one’s financial and legal affairs if one becomes incapable. Having a valid power of attorney is a critical component of the plan for what happens if one loses capacity. This is true even for folks with very simple or minimal assets. Even modest assets require some degree of management; almost everyone has bills and income that require management.

In British Columbia, under the Power of Attorney Act (“the Act”), an adult is presumed to have the capacity to create an enduring power of attorney. However, the Act also states that an:

"adult may make an enduring power of attorney unless the adult is incapable of understanding the nature and consequences of the proposed enduring power of attorney."

The Act defines what is meant by “incapable” in this context:

• An adult is incapable of understanding the nature and consequences of the proposed enduring power of attorney if the adult cannot understand all of the following:
  • the property the adult has and its approximate value;
  • the obligations the adult owes to his or her dependants;
  • that the adult's attorney will be able to do on the adult's behalf anything in respect of the adult's financial affairs that the adult could do if capable, except make a will, subject to the conditions and restrictions set out in the enduring power of attorney;
  • that, unless the attorney manages the adult's business and property prudently, their value may decline;
  • that the attorney might misuse the attorney's authority;
  • that the adult may, if capable, revoke the enduring power of attorney;

Waiting until one’s ability to understand the above items is lacking, or in question, can be a risky decision. If one does not already have an enduring power of attorney, one’s loved one(s) may be placed in the unenviable position of having to make an application to the Supreme Court of B.C. for authority to deal with one’s financial and legal affairs. This application is known as a committeeship application and can involve significant cost (often between $3,500 and $8,000) and time (months). Creating an enduring power of attorney costs significantly less (usually only a few hundred dollars) and takes significantly less time.

Creating an enduring power of attorney is a model example of the adage, “an ounce of prevention is worth a pound of cure.” Having created one when your capacity to do so was not in question can save you and your loved ones a great deal of stress, time, and expense in the future, and can do so at a relatively minimal cost.

Let us know if we can help.