Power of Attorney Act ( BC) Sets Out Test For Capacity and Duties

New Power of Attorney Act for BC

Much of the financial abuse seen by disinherited.com over the years relates to the abuse of a power of attorney by the very person entrusted to be the attorney.

After many years in the making, a new Power of Attorney Act came into effect in British Columbia on September 1, 2011.

It is a substantial improvement over its predecessor statute.

disinherited.com will review many of the significant changes in the new legislation in this and in following blogs.

One of the most significant change was is that the first time the statute sets out a clear test for determining whether an adult is mentally capable of entering into an enduring power of attorney.

Section 12 specifies 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 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:

A. The property the adult has and its approximate value;
B. The obligations the adult owes to his or her dependents:
C. That the adult attorney will be able to do on the adult’s behalf anything in respect of the adults 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;
D. That, unless the attorney manages the adult business and property prudently, their value may decline;
E. That the attorney might misuse the attorneys authority;
F. That the adult may, if capable, can revoke the enduring power of attorney;
G. Any other prescribed matter.

In the opinion of disinherited.com this is a significant increase in the amount of mental capacity that was required before, and pursuant to the BC Court of Appeal decision in Egli Committee v Egli.

The legislation also allows for what is known as “springing” powers of attorney that can be activated by a predetermined criteria such as being assessed as mentally incompetent by one or two doctors.

The definition of enduring power of attorney is as follows;

A power of attorney in which an adult authorizes an attorney to make decisions on behalf of the adult, or do certain things in relation to the adults financial affairs, and that continues to have effect while, or comes into effect when, the adult is incapable.

disinherited.com applauds the introduction of springing powers of attorney and the clarification and increased amount of capacity required to enter into a power of attorney. These two factors alone may have a significant impact in the reduction of financial abuse pursuant to the use of a power of attorney.

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