THE 10 MOST OFTEN ASKED QUESTIONS ABOUT POWERS OF ATTORNEY IN BRITISH COLUMBIA
1) What is a Power of Attorney?
This is a document that allows a person (called an attorney) or persons to handle the financial and legal affairs of another person (called a donor). It does not extend to making decisions regarding personal care or consent to medical treatment (this can be accomplished in B.C. by making a Representation Agreement). It may be limited to certain assets or limited in time.
2) When does a Power of Attorney take effect?
A Power of Attorney takes effect immediately upon signing unless it has a specified triggering event, such as incapacity. It ceases on death, if revoked or if the donor becomes mentally incapable (unless the Power of Attorney has an “enduring clause” in it).
3) Do I still retain the ability to handle my own affairs if I give a Power of Attorney?
Yes. However, you must trust the person you choose as your attorney because the attorney will also have the ability to deal with your assets.
4) What fee is my attorney entitled to?
No fee unless one is specified in the document, (normally no fee is set out) but an attorney is entitled to be reimbursed for out of pocket expenses.
5) What if I think an attorney is not doing a good job?
It may be possible to revoke a Power of Attorney. There are also ways to remove or replace attorneys or committees. Sometimes this involves the Public Guardian and Trustee or the police. The first step is to get legal advice.
6) Can transfers or gifts made during someone’s lifetime be attacked?
Yes. There are a number of grounds and legal presumptions that assist in setting aside transfers and gifts depending on the circumstances.
7) What are the alternatives to Powers of Attorney?
If a person is still “mentally capable” there are a number of alternatives that can be considered, such as trusts, joint holdings and nomination of committee. When a person is “mentally incapable” the only way an individual can assist the person is to obtain a court order for committeeship of “estate” for financial and legal affairs and/or of “person” for personal affairs (such as consent to medical treatment, where to live etc.). An Applicant can be appointed either or both committee of estate and person. More than one person can also be appointed co-committees.
8) How do I become committee?
A number of documents must be filed, including affidavits from two Doctors who have examined the person and who are of the opinion that the person is incapable, and an affidavit from the Applicant setting out the next of kin, assets, income, expenses and liabilities of the person. After service of the documents on the patient, next of kin and the Public Guardian and Trustee (the Public Guardian and Trustee submits their comments to the court), the court will hear the application and make an order. A bond or other security is usually required as a means of protecting the incapable person’s estate.
9) Is a committee paid?
Yes. A committee must keep accounting records of the patient’s income and expenses and pass these accounts before the Public Guardian and Trustee at a time to be set by the Public Guardian and Trustee. At that time, the Public Guardian and Trustee determines the fee. In addition, committees are entitled to reimbursement for reasonable and proper expenses including the legal costs of the application and bond premiums.
10) In the future, what changes to the law are expected?
British Columbia has been planning changes to the statutory and court appointed committee process. The statutory committee provisions were introduced in the Spring of 2014. Further changes may be addressed in future legislative amendments. Ask us about the details.
The above answers are very general statements of British Columbia law regarding Powers of Attorney and Committeeships. You need legal advice as soon as possible if you are or may be involved with one of these issues. We have considerable experience in these areas. Please do not hesitate to call us if we can be of assistance.
THE 10 MOST OFTEN ASKED QUESTIONS ABOUT WILLS & ESTATES IN BRITISH COLUMBIA
1) What happens if I die without a Will?
The Court will appoint an administrator to handle the estate. The Wills Estates and Succession Act (” WESA”) sets forth the manner in which an estate is distributed when a person dies without a Will. For example, if you have a spouse and two children who are the children of your spouse, the first $300,000 goes to the spouse and the remainder is divided ½ to the spouse and the other ½ divided equally between the two children. A spouse includes a common law spouse, including same sex partners, provided the spouse and the deceased were in a marriage like relationship for the two years immediately prior to the deceased’s death.
2) How does marriage or divorce affect a will?
Unless a Will is made in express contemplation of a marriage, marriage invalidates a will if the marriage took place prior to March 31, 2014. WESA provides that marriages that occur after March 31, 2014 will not revoke a valid Will. Divorce results in the divorced spouse having deemed to have predeceased the testator (the person that made the will).
3) How can a will be challenged?
In B.C., a Will must comply with the WESA requirements on form and witnessing in order for the Will to be valid. With limited exceptions, handwritten wills that are not properly witnessed are not valid unless the Court, under the terms of WESA, orders that it is a valid Will. Even properly witnessed wills may be challenged on the basis of lack of testamentary capacity or undue influence.
4) Can a disappointed child vary a will?
Under the WESA, a child (infant or adult) or the spouse (includes common-law spouses or same sex spouses) of a deceased can apply to the Court to vary the deceased’s Will. A Will can be varied if it does not make adequate provision for the proper maintenance and support of the claimant. A claim must be filed within 180 days of the grant of probate of the Will. It is difficult but not impossible to validly disinherit a spouse or a child.
5) What are the duties of an executor of a Will?
An executor or administrator is a Trustee and as such has important responsibilities and potential liabilities. For example, the executor is responsible for the funeral, converting the assets into cash, investing the assets, keeping accurate records, filing tax returns, paying the debts and distributing the estate to the beneficiaries.
6) Do beneficiaries pay tax on their inheritances?
Generally speaking, all taxes are paid by the estate, so gifts are received “tax paid”. There is no succession tax in Canada at present but B.C. has a probate fee based on the value of the estate which is paid by the estate.
7) I provided care services for my grandparents without pay until they died but I am not a beneficiary in their Wills, what can I do?
When someone provides services to a person with the expectation of receiving a benefit and the benefit is not forthcoming, that person has a valid claim for payment for services rendered on the basis of unjust enrichment. If the benefit provided was with respect to a specific asset, then a constructive trust claim could be made against that asset.
8) Are executors or administrators entitled to a fee?
Yes. Unless the Will specifies some other remuneration, the Trustee Act sets out a maximum fee of 5% of the gross value of the estate plus 5% of the income plus 0.4% of the average annual value of the assets. The fee is taken when the accounts are passed. In addition, they are entitled to reimbursement for reasonable out of pocket expenses.
9) When will the distribution take place?
This depends on the terms of the Will and the nature of the assets. In general, no distribution of an intestate estate may occur until one year from the date of death and no distribution under a Will may occur until 210 days from the Grant of Probate. As well, no distribution should occur until tax clearance certificates have been obtained, advertising for creditors has been done and the estate accounts have been passed.
10) What if I think an executor is not doing a good job?
Usually a letter from the beneficiary’s lawyer will solve the problem but sometimes an application to the court for directions must be made. In serious cases, executors can be removed or replaced. The first step is to get legal advice.
The above answers are very general statements of British Columbia law regarding Wills & Estates. You need legal advice as soon as possible if you are or may be involved with one of these issues. We have considerable experience in these areas. Please do not hesitate to contact us if we can be of assistance.