Alberta Enduring Powers of Attorney
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In this blog, I’ll be continuing my discussion of the various things you’ll find in an Enduring Power of Attorney for Property.
First, the Donor (the party making the Enduring Power of Attorney) and the nature of the document (e.g. Enduring Power of Attorney) are identified. The date on which the Power of Attorney is made is typically included here too. The date is important because, unless stated otherwise, the Enduring Power of Attorney generally takes effect from the time it is entered into.
Revoke Previous Powers of Attorney
Here, you can revoke any previous powers of attorney you have made. If you are making multiple Enduring Powers of Attorney (e.g. each one with a specific attorney to handle specific property), then just be sure to indicate that you are not revoking those ones too!
Power of Attorney Act
This section indicates that the document is an Enduring Power of Attorney made in accordance with the Powers of Attorney Act.
Appointment an Attorney
Next, you’ll need to identify your Attorney. Use their full legal name and even adding an identifier (e.g. my son, my spouse, etc.) may help. You can also consider appointing more than one person as your Attorney. This may be to share or divide responsibilities and to make sure there are sufficient checks and balances on decision-making; at the same time, it may overly complicate things and cause headache (diverging opinions coupled with joint decision-making authority may cause delays and turmoil!). With respect to who you should select to by your Attorney, it is ideal to select someone who has knowledge or experience dealing with property and finances. This can be a family member, friend, or financial institution. The Attorney does not need to live in Alberta. Finally, you cannot appoint the Public Trustee to act as your Attorney.
Appointment a Substitute Attorney
For whatever reason, in case the individual you appointed is incapable (e.g. vacation, sickness, death) or unwilling (e.g. through retirement) to act or continue to act as your Attorney at the time they need to, you should appoint a substitute Attorney. Better be safe than sorry!
Generally, an Enduring Power of Attorney becomes effective the moment it is signed by the Donor and witnessed. That said, pursuant to section 5(1) of the Powers of Attorney Act, the Donor can make it clear that they only wish the Enduring Power of Attorney to become effective “at a specified future time or on the occurrence of a specified contingency, including, but not limited to, the mental incapacity or infirmity of the donor”. Now, where the Enduring Power of Attorney becomes effective because of the infirmity or mental incapacity of the Donor, the Enduring Power of Attorney can specify who is required to make that determination for the Enduring Power of Attorney to take effect. If the Enduring Power of Attorney does not name a person or if that person dies or is unable or unwilling to make that determination, then section 5(4) of the Act says that the Enduring Power of Attorney shall become effective “when 2 medical practitioners declare in writing” that the Donor has become infirm or mentally incapacitated.
Authority of Attorney
An Attorney has the authority to make decisions on the Donor’s behalf concerning their property and finances. This includes doing things like: writing cheques on bank accounts, accessing safety deposit boxes, investing money, buying and selling securities, selling or managing real estate, signing documents related to property, collecting debts owed, or voting corporate shares which the Donor holds. An attorney can also exercise their authority with respect to the maintenance, education, benefit and advancement of the donor’s spouse, adult interdependent partner and dependent children. You can also specify that your Attorney has the power, in his or her sole and absolute discretion, to act as your litigation guardian to commence/defend/represent you in court, to take annual compensation in light of being your Attorney, to deal with the Canada Revenue Agency on your behalf, etc. It is worth mentioning that, unless the Enduring Power of Attorney says otherwise, an Attorney will be subject to the restrictions and conditions imposed on trustees when investing which are found under sections 2 to 8 under the Trustee Act, R.S.A. 2000, c. T-8. These sections require, for example, that the Attorney “invest trust funds with a view to obtaining a reasonable return while avoiding undue risk” and consider various factors in their investment decision-making.
Enduring Powers of Attorney may grant the Attorney an unlimited or limited power to act. If there are limitations, then they should be spelled out. For example, the Donor may limit the Attorney’s power by allowing them to only deal with certain property in certain places at certain times. The Attorney may be required to consider various listed factors before exercising their discretion. The Attorney may be required to consult with specific people. The Attorney may be required to resolve contentious matters in a certain way (e.g. mediation or arbitration). There may be prohibitions altogether on what the Attorney can do.
Protection of Attorney
Generally, the Donor will agree to release the Attorney from liability for losses or damage to the Donor’s property or financial affairs. Also, the Donor will generally agree to indemnify (i.e. pay) the Attorney for claims which may arise by their exercising or failing to exercise their duties under the Enduring Power of Attorney or under the laws that govern them. Both the release of liability and the indemnification provision would not apply, however, if they were brought about by the Attorney’s own dishonesty or gross negligence.
Worth mentioning is that, under section 14(1) of the Powers of Attorney Act, an Attorney is not personally liable to the Donor or any other person for acting under a Power of Attorney that was terminated or void because of the Donor’s mental incapacity or infirmity – BUT ONLY IF the Attorney did not know, and had no reasonable grounds for believing that the Attorney’s authority had terminated or been lost. Furthermore, in these situations, any exercise of the Power of Attorney is VALID AND BINDING in favour of any person who did not know, and who had no reasonable grounds for believing, that the Attorney’s authority had been terminated or lost: section 14(2) of the Act.
This section clarifies that the Enduring Power of Attorney continues to be effective even after the Donor has become infirm or mentally incapacitated – as permitted by the Powers of Attorney Act.
Matrimonial Property Act Consent
If the donor is or gets married, this section says that the Attorney can act on the Donor’s behalf with respect to the matrimonial home under the Matrimonial Property Act, R.S.A. 2000, c M-8. That Act defines the matrimonial home as property that is owned or leased by one or both spouses, is or has been occupied by the spouses as their family home, and which is either a house, part of a house, a mobile home, a residential unit, or a suite. This consent may be needed, for example, if the Donor is going through a divorce and has to divide his or her property under the Matrimonial Property Act’s regime.
This section allows the Attorney to delegate, and revoke a delegation of, their authority to another person.
This section says that the Attorney can be the litigation representative to act on the Donor’s behalf in any court proceedings. Rule 2.11 of the Alberta Rules Of Court, Alta Reg 124/2010 says that a litigation representative is required for an adult involved in court proceedings who lacks capacity (as defined in the Adult Guardianship and Trusteeship Act) to make decisions. Rule 2.13 says that a person is automatically a litigation representative under the rules if the person has authority to start, settle or defend a claim on behalf of an individual under a power of attorney.
This section says that the Attorney can be the legal representative of the Donor when dealing with government bodies, agencies, boards, etc.
Unless the Enduring Power of Attorney says otherwise, an Attorney is entitled to receive a fair and reasonable amount of compensation for acting on behalf of the Donor. The amount of compensation may be specified in the Enduring Power of Attorney or may be based on the Trustee Act, R.S.A. 2000, c T-8. If the Donor is mentally incapacitated, then the Attorney must seek approval for their proposed fee from the Court in accordance with the Trustee Act; in that case, the Attorney is not permitted to pre-take compensation, but must wait for the direction of the Court in that regard. Any compensation received by an Attorney is considered to be taxable income from an office or employment and must be reported by that Attorney in his or her Income Tax Return for the year in which such remuneration was actually paid to him or her.
Here, the Donor will acknowledge various things to help ensure that they have sufficient mental capacity to make the Enduring Power of Attorney for Property.
Use blue ink (to show it’s an original signature) instead of black. Also, please read above concerning who can qualify as a witness.
Affidavit of Execution
It is a good practice to have the witness swear or affirm that they saw the Donor signing the Enduring Power of Attorney before a commissioner for taking oaths in Alberta (e.g. a lawyer). This helps to establish that there was a witness who was present at the time the Donor signed. Also, the witness can swear or affirm that they believed the Donor was of sound mind at the time of signing the Enduring Power of Attorney.