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Jan

23

Power of Attorney Alberta

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Power of Attorney Alberta

I’m pleased to announce that we have just released our latest software for 7 Canadian Provinces:

The Power of Attorney Wizard will allow users to make a custom-tailored .pdf Power of Attorney for property and financial matters. There’s nothing else like it on the Internet. It’s been in the works for many months and will be available for the following provinces:

  • Ontario
  • Alberta
  • British Columbia
  • Saskatchewan
  • Manitoba
  • New Brunswick
  • Nova Scotia

So what makes the Power of Attorney Wizard so great? A lot! It is the most advanced, comprehensive, and flexible software out there for making a Power of Attorney (including Enduring Powers of Attorney). The amount of detail that went into this software is truly amazing. Here are some highlights:

  • Very comprehensive (nothing else comes close)
  • Very flexible in terms of the options (again, nothing else comes close)
  • Based on provincial POA laws (unlike other kits)
  • Created by a Canadian lawyer (i.e. me)
  • Comes with free signing instructions
  • Comes with free edits for 90 days
  • Comes with free eBook about Powers of Attorney for your Province
  • It will be regularly updated (particularly when the laws change)
  • Affordable: only $57 + tax!

I’m very excited about the Power of Attorney Wizard. It will go hand in hand with Canada’s #1 Will-creation software: the Will-O-Matic, which is offered exclusively here on DynamicLegalForms.com. I’m sure the Power of Attorney Wizard will get as much fanfare from the public and the press as the Will-O-Matic has received in the short time that it has been around.

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice, you should seek professional assistance.

What is an Enduring Power of Attorney?

In Alberta, a “Power of Attorney” is a legal document that designates a person (known as an “Attorney”) to act on behalf of another person (called a “Donor”) in respect of their property and finances (if you’re reading this and preparing your Power of Attorney, then YOU are the Donor!).  The word “Attorney” does not mean that the person is or becomes a lawyer.  They are simply the person appointed as such and nothing more.  Powers of Attorney are governed by the Powers of Attorney Act, R.S.A. 2000, c P-20.  The word “Enduring” may appear in front of “Power of Attorney” and this means that the Power of Attorney includes a statement that it is to take effect on the mental incapacity or infirmity of the Donor OR it is to continue notwithstanding any mental incapacity or infirmity of the Donor (which occurs after the Power of Attorney is signed and witnessed).  If the Power of Attorney is NOT “Enduring”, then it will cease to have effect when the Donor becomes incapacitated.

Why do you need an Enduring Power of Attorney?

The most common reasons to have an Enduring Power of Attorney include:

  • being able to manage your property and finances if you become ill, incapacitated, or suffer a serious injury; and
  • being able to manage your property and finances while you travelling away from Alberta for an extended period of time.

Examples of where an Enduring Power of Attorney comes in handy include: signing papers to purchase a residential home, transferring money into or out of a bank account, managing a business, or suing or defending yourself in a lawsuit.  The benefits of having an Enduring Power of Attorney for Property include having control over who makes decisions on your behalf (and sometimes how they make those decisions) concerning your property and finances when you can no longer do so.  Also, having an Enduring Power of Attorney for Property can help avoid litigation (and the wasted time, money, and effort) to see who will be appointed to be your trustee under the Adult Guardianship and Trusteeship Act, S.A. 2008, c A-4.2.

What if I don’t have a Enduring Power of Attorney?

If you do not have an Enduring Power of Attorney, your financial affairs are not automatically transferred to family members (a common misconception).  Rather, someone must apply to the court to become “trustee” of your property.  They do this by making a “Trusteeship” application under the Adult Guardianship and Trusteeship Act, S.A. 2008, c A-4.2.  This application requires, among other things, a capacity assessment report respecting the adult who is the subject of the application and a trusteeship plan in the prescribed forms.  In coming to a decision, the Court will examine whether the adult has sufficient capacity to making decisions respecting their financial affairs, assess whether less intrusive and less restrictive measures are available to adequately protect the adult’s best interests in respect of financial matters, and determine whether it is in the interests of the adult to appoint a trustee (given various factors).  In general, the government (i.e. the Public Trustee under the Public Trustee Act, S.A. 2004, c P-44.1) does not step in to help; rather, it acts only in situations where no other suitable person is available, able and willing. This court process can be lengthy, costly and emotionally draining.  It can also result in disagreements among your family members and friends, with the end result being that authority is given to someone whom you yourself might not have chosen.

What are the legal requirements to have an valid Enduring Power of Attorney?

To have a valid Enduring Power of Attorney under sections 2 and 3 of the Powers of Attorney Act:

  1. It must be written and signed by the Donor and one witnesses (who must be present when the Donor signs).  The Enduring Power of Attorney does not need to be in a set form or template.
  2. The document must authorize a person to be an Attorney to make decisions, on the Donor’s behalf, concerning the Donor’s property and finances.
  3. The Donor must be at least 18 years old at the time of making the Enduring Power of Attorney.
  4. The Donor must be mentally capable of understanding the nature and effect of the Enduring Power of Attorney at the time they sign it.
  5. The Enduring Power of Attorney must be signed by one witness who IS NOT: a minor, the Attorney, a person who signs the Enduring Power of Attorney on the Donor’s behalf, or the spouse or adult interdependent partner of the Attorney, Donor, or person who signs on behalf of the Donor.

With respect to the requirement that a Donor must have sufficient capacity to grant the Enduring Power of Attorney, the Donor must be over 18 years old and should:

  • know what kind of property he or she has and it’s approximate value;
  • be aware of the obligations owed to his or her dependents;
  • know that the Attorney must account for his or her dealings with the person’s property;
  • know what authority is being granted to the Attorney;
  • appreciate that the Attorney’s mismanagement could result in a decline of the value of property; and
  • understand the consequences of an Attorney misusing their authority.

Is a lawyer required?

The Powers of Attorney Act does NOT require that a lawyer prepare, witness, notarize, etc. your Power of Attorney for it to be legal.  That said, if you have a complicated situation (e.g. specific attorneys for specific purposes, a limited scope power of attorney, etc.), it may be worthwhile to engage a lawyer to prepare a Power of Attorney or Enduring Power of Attorney for you.  If you are worried that a party may challenge your ability to make the power of attorney (e.g. based on you lacking the mental capacity to do so at the time you signed it), then you should also consult a lawyer.  They will know how to legally address this situation to reduce the risk of future challenges – for example, by getting a medical report confirming your capacity at the time you make the Power of Attorney.

How do you terminate an Enduring Power of Attorney?

If the Donor becomes mentally incompetent and is unable to revoke the Enduring Power of Attorney, the Enduring Power of Attorney and the Attorney’s authority to act will continue until or unless terminated in any of the following circumstances:

  • If, upon the application to the Court of an interested person, the Court were to remove the Attorney;
  • Upon the Court appointing a Trustee to act as Trustee of the Estate of the Donor under the Adult Guardianship and Trusteeship Act of Alberta;
  • Upon a Trustee being appointed to act as Trustee of the Estate of the Attorney under the Adult             Guardianship and Trusteeship Act of Alberta;
  • Upon the obtaining of Court approval in the case where the Attorney has accepted the appointment and commences to act, but later wishes to resign;
  • Upon the death of the Attorney or the death of the last remaining Attorney; or
  • Upon the death of the Donor (in which case only the Personal Representatives of the Donor have the authority to deal with the Estate of the deceased Donor).

Do you have to deposit your Enduring Power of Attorney somewhere?

There is no requirement that you deposit your Enduring Power of Attorney in any specific place. Indeed, the government of Alberta does not offer any kind of registry for keeping Enduring Powers of Attorney.  As such, it is best to leave the Enduring Power of Attorney in a secure place (e.g. fireproof safe, with a trusted third party) and let your Attorney know where it is (or give him or her a copy), along with your Last Will and Testament.  Instead of making additional original versions of the Enduring Power of Attorney, it is best to make one version and then have a lawyer notarize a true copy of that original.

What happens when I die?

The Enduring Power of Attorney only has effect while the Donor is alive.  When the Donor dies, their Will (if they have one) or Alberta’s intestate laws (if they do not have a Will) will govern the final disposition of their property.  Here, the Attorney will need to account to the donor’s representative or trustee of their estate for the transactions that they entered into under the Enduring Power of Attorney: section 10 of the Powers of Attorney Act.

When does an Enduring Power of Attorney become effective?

An Enduring Power of Attorney generally takes effect IMMEDIATELY as soon as it is signed or when the Donor becomes mentally incapacitated or infirm.  If you want the Enduring Power of Attorney to apply only at a certain time (e.g. a date) or upon the occurrence of a certain event (e.g. when you are deemed incapacitated by two independent medical practitioners), then it should clearly state that.  You can indicate in your Enduring Power of Attorney who you want to be responsible for providing a written declaration that a certain time or occurrence of a certain event has happened: section 5 of the Powers of Attorney Act.  That person can be your Attorney.  If your Enduring Power of Attorney does not mention who will determine that you have become mentally incapable or infirm (or that person is unable or unwilling to make that determination), then “2 medical practitioners” will make that determination in writing: section 5(4) of the Powers of Attorney Act.

Duty and Authority of Attorney

The Attorney has a fiduciary or special trust relationship with the Donor.  As such, the Attorney is required to act in good faith in light of the Donor’s best interests.  The Attorney’s duties include: following the Donor’s instructions, avoiding conflicts of interest, being loyal to the Donor, and not using the Donor’s personal information in a way that could prejudice the Donor’s interests.

What is the basic structure of an Enduring Power of Attorney?


Introductory Clause

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!

Powers 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!

When Effective

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: section 7 of the Powers of Attorney Act.  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.  If a Donor wishes to avoid the restrictions imposed on an Attorney under the Trustee Act, they could add the following statement in their Enduring Power of Attorney:

“For greater certainty, My Attorney may invest my money in any kind of property and not limited to investments expressly authorized by law. When making investments, My Attorney shall not be subject to the criteria or requirements for making investments of the trust property which are prescribed by the law for trustees.”

Restrictions

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.

Incapacity

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.

Delegation

This section allows your Attorney to delegate, and revoke a delegation of, their authority to another person.

Litigation Representative

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.

Legal Representative

This section says that the Attorney can be the legal representative of the Donor when dealing with government bodies, agencies, boards, etc.

Compensation

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.

Acknowledgments

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.

Signatures

Use blue ink (to show it’s an original signature) instead of black.  Also, please read above concerning who can qualify as a witness.

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