Power of Attorney (15:IV)

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. A mentally capable adult does not give away their authority to an attorney. Rather, the effect of a POA is to share the authority with the attorney. POAs can vary in scope, depending on the:

• specific needs of the Adult;
• types of decisions an Attorney is permitted to make;
• time period (i.e. ongoing or set for a limited period);
• how many Attorneys are appointed; and
• need for unanimous decisions or task-specific roles.

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 behalf of the Adult.

Students should confer with their Supervising Lawyer if there is any doubt that the client understands and appreciates the nature and consequences of a POA. Also, note that an adult should not be required to have a POA as a condition of receiving any good or service.

The following sections explain in more detail: what type of POAs can be made; who is involved in a POA; how a POA can be made, changed, or revoked; the duties and powers of an Attorney; and what can be done if an adult is incapable and does not have a valid POA in place.

A. Types of POA

There are two types of POAs. It is important to find out what type of POA would best suit the client’s needs. 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 he or she becomes incapable?
• How will incapacity be decided?
• Does 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 Power of Attorney Act, and by common law for agency relationships. These are effective immediately, or as specific 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.
2. Enduring: Enduring POAs (EPOAs) are governed by Part 2 of the Power of Attorney Act. These can be effective immediately, or springing. (See note below for details on springing EPOAs.) Enduring POAs continues in the event that the Adult lose capacity, and only ends upon revocation or death.
   • NOTE: 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 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 institutions 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. The most common POA is the Enduring Power of Attorney (EPOA), which allows the Attorney to act while the Adult is capable and continues when/if the Adult becomes incapable. 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).

NOTE: 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 Power of Attorney Act.

B. Who is Involved in a Power of Attorney?

Only a capable adult (called an ‘Adult’ in the legislation) may make a POA. A POA requires at least one person to act as an Attorney. The Adult may name multiple or alternate Attorneys.

In some situations, the Public Guardian and Trustee can be appointed as the Attorney, particularly where an adult does not have family or friends who can act on his or her behalf. The Public Guardian and Trustee may also become involved where there is financial abuse, neglect or self-neglect, particularly if there are concerns that an Attorney is misusing a POA, or concerns that an Attorney is failing to fulfill their legal duties.