View source for Substitute Decision Making for Adult Guardianship (15:IV)

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== A. Power of Attorney ==
A Power of Attorney (POA) is a legally binding document that allows a capable adult (called the ‘adult’) to grant the authority to other capable adult(s) (called the ‘attorney(s)’) to make financial and legal decisions on their behalf.  

The adult can make very individualized and specific provisions in a POA.  For example, a POA can be very narrow in scope, allowing the attorney(s) to do one specific act (e.g. cashing a pension cheque, transferring property, or paying insurance).  Alternatively, the adult can make a POA that is intentionally broad in scope, allowing the attorney(s) to handle all financial decisions on their behalf. 

The following sections explain: what types of POAs can be made; the test for capacity to create a POA and what can be done in the event of incapacity; who is involved in a POA; how a POA can be made, changed, or revoked, and useful information for LSLAP students dealing with POAs.

=== 1. Overview of Power of Attorney ===

==== a) Types of Power of Attorney (POA) ====
There are two types of POAs.  It is important to find out what type of POA would best suit the adult’s needs.  The first is governed by Part 1 of the PAA, and is sometimes called a ‘General POA’. The second is governed by Parts 2 and 3 of the PAA, and is sometimes called an ‘Enduring POA’. The key difference between the two is that a POA under Part 1 ends once the adult becomes incapable, while a POA under Parts 2 and 3 continues even when the adult becomes incapable.  Questions to ask include: 

•	What tasks does the adult want the attorney to be able to perform?
•	When does the adult want the attorney to begin to act?  
•	Does the adult want the POA to be used for a limited time only?
•	Does the adult want the POA to be in effect immediately or only when they become incapable? 
•	How will incapacity be decided? 
•	Do the adult’s powers terminate if and when the adult becomes incapable?

The two types of POA are as follows:
1.	General: General POAs are governed by Part 1 of the PAA, and by common law for agency relationships.  They are effective immediately, or as specified on the document, and ongoing until the loss of capacity, revocation or death.  The test for capacity for making general POAs can be found in the BCLI’s Report on Common Law Test of Capacity:
 http://www.bcli.org/wordpress/wp-content/uploads/2013/09/2013-09-24_BCLI_Report_on_Common-law_Tests_of_Capacity_FINAL. pdf.  
General POAs are rarely used in incapacity planning, as they become no longer in effect when an adult becomes incapable (which is often when a POA is most needed).

2.	Enduring: Enduring POAs (EPOAs) are governed by Parts 2 and 3 of the PAA.  Enduring POAs continue in the event that the adult loses capacity, and only ends upon revocation or death. These are the most common type of POA, they allow the attorney to act while the adult is capable and continue when/if the adult becomes incapable. 
 
EPOAs can be effective immediately, or ‘springing’. A ‘springing’ EPOA stays dormant until a future date or event (i.e. the loss of capacity) and ends only upon death.  The adult can decide in advance how capacity is to be determined, such as by requiring the agreement of a family member and two doctors.  A springing EPOA is not active until the adult loses capacity. 

See ''[https://www.canlii.org/en/bc/bcca/doc/2004/2004bcca100/2004bcca100.html?searchUrlHash=AAAAAQA2R29vZHJpY2ggdiBCcml0aXNoIENvbHVtYmlhIChSZWdpc3RyYXIgb2YgTGFuZCBUaXRsZXMpAAAAAAE&resultIndex=1 Goodrich v British Columbia (Registrar of Land Titles)]'', 2004 BCCA 100.  (The BCCA decided that even though the PAA does not explicitly allow for a springing power of attorney, it is nevertheless possible to make one.)

Both general POAs and EPOAs can be limited in relation to assets, duration, or specific types of transactions.  For example, an adult could draft a POA for the attorney to manage their bank accounts and pay their bills while they are on vacation, but not give authority to the attorney over their real estate and investments.  A bank’s POA will be limited to transactions at that institution for the accounts identified.  

In most cases, the POA will be effective immediately, once signed and witnessed by the adult and attorney(s), and will continue on an ongoing basis.  
	
Unless otherwise specified, all usage of the term ‘POA’ in the subsequent sections of this chapter refers to an Enduring Power of Attorney as governed by Part 2 of the PAA.

==== b) Who can Appoint and Revoke an Attorney ====
The ‘adult’ is any adult who makes a POA to appoint an attorney to make financial decisions on their behalf.  The adult must be (PAA s10 and 12):

•	An individual who is 19 years of age or older
•	Mentally capable of making a POA
•	Acting voluntarily, or on their own  

The adult must have mental capacity at the time that the POA is signed, and must be able to understand the nature and implications of a POA.  An adult who has mental capacity has the legal right to make decisions, including the legal right to choose whether to: 

•	Determine the type, scope or purpose of the POA
•	Define the roles and authority of the appointed attorney(s)
•	Provide instructions to the attorney(s)
•	Express wishes, values and beliefs
•	Change or revoke a POA

==== c) The Test of Capacity ====
An adult is presumed to be capable of making decisions about their financial affairs and of understanding the nature and consequences of making, changing or revoking an enduring POA (section 11 PAA).  

Pursuant to section 12 of the PAA, an adult is incapable of understand	ing the nature and consequences of the proposed enduring power of an 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 their dependants;
(c)	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;
(d)	that, unless the attorney manages the adult’s business and property prudently, their value may decline;
(e)	that the attorney may misuse the attorney’s authority;
(f)	that the adult may, if capable, revoke the enduring power of attorney;
any other prescribed matter.

If an individual does not complete a POA while they are capable, and later becomes incapable of managing their financial affairs, the adult may be able to create a Representation Agreement, which has a lower test of capacity.  Alternatively, a capable, interested person can apply to the court for committeeship, in order to manage the incapable adult’s affairs.  

==== d) Attorney(s) ====
An attorney is an adult who is capable and willing to carry out the financial tasks and/or make financial decisions on behalf of the adult. An attorney is required to sign the POA to signify that they accept the role and the responsibility. If an attorney is not willing to accept this role, then the attorney should not sign the POA.  In this context, an ‘attorney’ does not need to be a lawyer, although an adult may wish to appoint their lawyer to act as an attorney. An attorney must be (PAA s 18 and s 19): 

•	An adult (i. e.  at least 19 years of age), the PGT or certain financial institutions
•	Mentally capable to carry out the financial tasks
•	Able to understand and fulfill their legal duties
•	Able and willing to act in accordance with the instructions, wishes, values and beliefs of the adult
•	Acting voluntarily/on their own.  

Section 18 of the PAA states who may act as an attorney.  One or more of the following persons can be named: 

•	An individual, other than:
o	An individual who provides personal care or health care services to the adult for compensation or, 
o	An employee of a facility where the adult resides and where the adult receives personal care or health services.
o	Exception: if the individual is a child, parent or spouse of the adult, in which case they may be named as attorney
•	The Public Guardian and Trustee
•	A financial institution authorized to carry on trust business under the Financial Institutions Act, RSBC 1996, c 141 [FIA].

More than one person can act as an attorney.  An adult who names more than one attorney may assign each a different area of authority, or all or part of the same area of authority (PAA s 18(4)).  The adult might prefer to define distinct roles for each attorney (i.e. appoint one as the attorney for certain transactions, such as personal banking and a second individual as their attorney over different matters, such as property).  The POA should be clear about the roles and responsibilities of each attorney and whether or not unanimous consent is necessary in each type of transaction.   

According to s 18(5) of the PAA, where an adult appoints multiple attorneys for all or part of the same area of authority, the attorneys must act unanimously in exercising their authority.  The exception to this rule is where the adult specifically does the following in the POA: 
•	Describes circumstances where the attorneys do not have to act unanimously 
•	Sets out how a conflict between attorneys is to be resolved
•	Authorizes an attorney to act only as an alternate and sets out: 
o	(i) The circumstances in which the alternate is authorized to act in place of the attorney,  for example, if the attorney is unwilling to act, dies or is for any other reason unable to act, and 
o	(ii) The limits or conditions if any, on the exercise of authority by the alternate. 

Where a POA appoints two or more attorneys to act for an adult, all the attorneys will need to be in agreement regarding decisions made for the adult, '''unless otherwise specified in the POA'''.  

Appointing more than one person has potential advantages and disadvantages.  The practice can reduce the potential for an attorney to misuse their power by providing built-in scrutiny by a second attorney.  However, having multiple attorneys may make the decision-making process complicated and inefficient.  

==== e) The Public Guardian and Trustee (PGT) ====
An adult who does not have relatives or friends who are willing and able to serve as an attorney may ask the PGT to consider acting as an attorney in the event of incapacity.  According to s 6(c) and s 23 of the PGTA, the PGT may agree to act as attorney for a fee.  If an adult needs to appoint the PGT as attorney, contact the Public Guardian and Trustee. It is important to note that the PGT will only act as a representative in matters of finance and will not be able to act as a representative for health care decisions.

Another circumstance where the PGT may become involved is where an attorney is misusing a POA or otherwise failing to fulfill their legal obligations.  Any person may notify the PGT if there is a reason to believe that fraud, undue pressure or some other form of abuse or neglect is being or was used to induce an adult to make, change or revoke financial or legal document(s).  Any person may also notify the PGT where an attorney is:

•	Incapable of acting as attorney
•	Abusing or neglecting the adult
•	Failing to follow the instructions in the POA
•	Otherwise failing to comply with legal duties of an attorney

For more information about the role of the PGT where there is financial abuse, neglect or self-neglect, refer to section '''VIII: Adult Abuse and Neglect''' in this chapter.  

For more information on the role of the PGT in general, please visit BC’s PGT website: https://www.trustee.bc.ca/Pages/default.aspx.

=== 1. Overview of Power of Attorney ===

{{REVIEWED LSLAP | date= June 21, 2019}}
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