Useless Power of Attorney – requiring opinion of incapacity
- Giving an example of where a power of attorney that doesn’t take effect until a doctor has sworn a statutory declaration confirming incapacity is useless
- Explaining that not all powers of attorney are the same and giving examples of some differences
Not all powers of attorney are created equal, a reality that Seana is coming to terms with.
Seana had been proactive, ensuring that her mother’s affairs would be in order. This included her mother, Beth, granting Seana power of attorney.
Beth, now age 81, lives independently but has been showing signs of dementia.
About a year ago, Beth’s doctor assessed her incapable of driving.
Beth’s very imprudent sale of her vehicle, for 15% of what it was worth, brought Beth’s financial vulnerability to the forefront for Seana.
Seana took the power of attorney to the bank so that she could access and monitor Beth’s transactions.
But she came up against a brick wall.
The power of attorney contains a clause saying that it doesn’t take effect until Beth has become incapable of managing her financial affairs and her lack of capacity is confirmed by a statutory declaration made by a doctor.
Has Beth’s dementia reached the level that a doctor would assess her incapable of handling her financial affairs? Seana doesn’t know.
Seana’s unable to get her mother assessed because Beth was so upset by her doctor determining that she was unable to drive that Beth now refuses to see her doctor.
Even if the assessment could be arranged, consider the administration and expense of having a statutory declaration prepared and then sworn by a doctor.
It didn’t have to be this way.
A power of attorney is effective as soon as it is signed unless there is a clause that says otherwise.
Your lawyer or notary shouldn’t be putting that clause in the document without explaining the implications to you.
My typical recommendation is to avoid such clauses, allowing the power of attorney to take effect immediately.
You won’t need help managing your financial affairs at the time you sign your power of attorney, but why put an administratively difficult and expensive roadblock in place for when you do need help?
A bonus is that you might appreciate help looking after things while you are snowbirding in Palm Springs or if you begin to have mobility issues.
Most financial transactions can happen electronically, but some still require you to attend in person. Your power of attorney can attend to anything at all that you would otherwise have to do yourself.
But what’s to stop your children, to whom you appoint power of attorney, from running amuck with your financial affairs before you need their help?
It would be unlawful for your power of attorney to take any action without your direction while you remain capable of handling your own affairs.
For your own piece of mind, you could choose to hang onto the document, not giving it to those you appoint until you want them to use it.
The power granted in a power of attorney cannot be exercised without having the actual document, or a certified copy, in hand.
And you can choose at any time to revoke it if you have second thoughts. Ensure you get advice about how to do that properly.
So what can Seana do to help protect her mother from financial vulnerability?
Maybe her mother would agree to make a new power of attorney that doesn’t contain the restrictive clause. But of course, she cannot do that if she is no longer cognitively capable.
If not, and Seana cannot figure out a way to get her mother medically assessed, Seana could report the matter to the office of the Public Guardian and Trustee (PG&T) as contemplated by section 32(b) of the Adult Guardianship Act, which can be accessed here (https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/96006_01#section32).
The folks at the PG&T have no power to force a capacity assessment, but they can apply to the Court for a committee to be appointed and part of that process will be marshalling evidence of Beth’s incapacity, which would include Seana’s observations and the observations of others. That expensive application could be brought by Seana herself, though, at lower cost to Beth’s eventual estate beneficiaries.
There are many variations of powers of attorney. It’s not just a matter of choosing whether or not the power of attorney becomes immediately effective.
One example is that there is a range of powers you can grant, from very narrow to very broad. Another is that if you appoint more than one, they can be required to act together or can be able to act separately.
Ensure, when you have a power of attorney prepared, that you are advised about the various options so that you can make informed decisions resulting in a document that will optimally serve your purposes.
