Expensive legal problem prevented with a Power of Attorney
- Providing an example of where a lack of Power of Attorney resulted in having to incur the exensive legal cost of having a legal representative appointed by the court for a spouse to sell jointly owned home and vehicles.
Mary called with a legal problem.
It has to do with her 85-year-old husband James who has dementia and had to move into a care facility.
The home Mary and James jointly own is larger than Mary needs and has stairs. She wants to downsize into a condo.
Mary no longer drives. She wants to sell the two vehicles she also owns jointly with James.
The legal problem? James lacks the cognitive capacity to transfer his joint ownership of the home and the vehicles.
And they hadn’t taken the wise step of appointing each other as representative by power of attorney.
Mary cannot sell those assets.
We’ve heard motivational comments that “age is just a number”, encouraging us to make the most out of life, as if we can put the brakes on the aging process
Indeed, there’s a lot we can do.
Next week I will be traveling to Calgary to visit my 85-year-old uncle Ed who will be taking several of my cousins and me hiking in the Rockey Mountains. He’s got a 13 kms out and back hike planned, with 850 metres of elevation.
Uncle Ed has been incredibly active in his retirement. He goes on mountain hiking excursions weekly and continues to play hockey. He’s a testament to “age is just a number”.
His activity level might be helping him avoid cognitive decline.
But statistically, according to Government of Canada publications, approximately 5.9 percent of Canadians aged 75-79 have dementia. It’s up to 12.4 percent for those aged 80-84. For the group of Canadians aged 85 and older it’s 24.6 percent.
Mary’s legal problem is a foreseeable one. Please go to the relatively minimal legal expense of appointing a representative by power of attorney while you still can.
Because it’s too late for Mary and James. You must have cognitive capacity to appoint a representative by power of attorney.
For Mary to be able to downsize her home and sell those vehicles, she will need to go through the expensive process of being appointed by the court as James’ legal representative. In legal terms, a court appointed representative if is called a “committee” (emphasis on the 1st and 3rd syllables).
I don’t do that legal work, so I did a little market research to help Mary find a reasonably priced lawyer to help her with that.
Some law firms publish fee estimates on their websites. One Lower Mainland firm has fee estimates ranging from $7,500.00 to $12,500.00, with a total of $10-12,500.00 when adding disbursements and taxes.
I called two Kelowna area firms. One provided an estimate of $5,000.00 and the other $6-7,000.00. Disbursements and taxes would be on top of that.
The bottom line is that Mary’s foreseeable legal problem, that could have been easily avoided, will cost approximately $10,000.00 to fix.
Those fee estimates assume that there won’t be a fight over who will be appointed. Fights cost much, much more.
I no longer provide incapacity planning services (powers of attorney and representation agreements) so don’t take this is as a fear mongering lawyer trying to get a bunch of business.
Please get these documents in place. And send this column to others you care about.
When consulting with a lawyer about a power of attorney, please go armed with having read last week’s column and the others I’ve written on the subject because it’s not a “one size fits all” document. Let me know if you need help finding those columns.
