The Law Relating to Incapability in British Columbia
This article is a brief outline of the law relating to incapacity in British Columbia. Please contact us for more information. If an adult person becomes mentally “incapable” that person may require assistance in handling their financial and legal affairs and/or their personal care. Hopefully, the person will have done some pre-planning, such as a Power of Attorney. If no pre-planning has been done, then steps may be taken to appoint a substitute decision maker for the incapable person.
British Columbia, like most jurisdictions, has a governmental department responsible for investigating, monitoring and often, handling the affairs of incapable people. This office is known as the Public Trustee.
It should be noted that this area of law is presently undergoing significant changes. Please see our article on the BC Adult Guardianship Legislation.
Appointment of Committee
The relevant legislation in B.C. is the Patient’s Property Act and Rules. The person appointed to help an incapable adult is described as a committee. The committee may be appointed to handle the incapable adult’s “estate” for financial and legal affairs and/or the incapable adult’s “person” for personal and medical affairs. More than one person can be appointed committee. A private trust company may be appointed committee.
In B.C, unlike some provinces, a person is either totally capable or totally incapable and if declared incapable, loses all rights regarding his estate and/or person, as the case may be.
The court application is made after filing affidavits of the opinions of two doctors regarding the incapacity of the adult and information on the next of kin, assets, income, expenses and liabilities of the incapable person. The documents are normally served on the proposed patient and the Public Trustee. The Public Trustee makes a written recommendation to the Court. Notice is usually given to next of kin. Often the applicant’s appointment as committee is conditional upon the applicant posting some security, such as a surety bond.
B.C. allows for the prior nomination of a committee (i.e. prior to incapacity). If a person has nominated a committee, the court will usually appoint the person so nominated.
The Public Trustee may also be appointed as committee of the estate of a patient by way of Certificate of Incapability, which is issued by a director of a provincial Mental Health facility.
If there is a contest between applicants for committeeship, the court will choose the person most likely to act in the patient’s best interests.
Powers of Committee
The power given to a committee is broad, but can be expressly limited by court order. The committee stands in the shoes of the incapable adult and therefore would have all the rights and powers that the adult would have if capable. The adult loses all authority over those areas.
A committee must keep records of the incapable adult’s income and expenses. It is important for the committee to keep invoices to prove expenses in case of a challenge to the accounts. A committee must be prepared to pass these accounts before the Public Trustee every year. Accounts must also be passed when the adult dies or the committeeship ends. Appeals from the passing of accounts can be taken to the court.
The Public Trustee has standard forms for the accounts, but there is no specified form that must be used. Often accountants may be retained to prepare the accounts.
Other Obligations of a Committee
A committee is a fiduciary and must act in the best interests of the incapable person, that is, without thought of personal gain. As well, a committee must not use any knowledge gained through the position for their own benefit.
A committee must act as a reasonable person would in all of the circumstances and consider what the patient would have wanted. A committee should consider the terms of the patient’s will (even though the will is not effective until the patient dies) and be cautious about changing the patient’s assets. The committee can also make payments to meet the patient’s obligations to the patient’s creditors and the patient’s family, but again care must be taken when exercising this power. Sometimes it is appropriate to obtain Public Trustee or court approval prior to making such payments.
The Committee is restricted to making investments on behalf of the patient in accordance with the B.C. Trustee Act.
Since the committee may not know of all of the person’s assets at the time the application to court is made, a committee must file an inventory of the person’s assets with the Public Trustee, within six months of the court order.
The committee for estate is responsible for filing tax returns for the patient.
The committee for person is responsible for ensuring the patient receives proper and reasonable care, but this does not mean that the committee must personally provide the care services to the patient.
The powers of a committee do not extend to making wills, voting, consenting to marriage and consenting to adoption of children by or on behalf of the patient. The committee may not delegate his or her authority, although he or she may retain professionals (such as accountants, lawyers, real estate agents) where this is necessary.
Termination of Committeeship
In B.C. the appointment of a committee continues until an application is made to declare the adult “capable” or is terminated by removal or death of the committee.
Death of the patient does not automatically end the committeeship. The committee’s authority continues until probate or administration has been granted.
Removal/Replacement of Committee
If the committee is not acting in the best interests of the patient or is in a conflict of interest, the committee can be removed by the court. Upon the removal or death of the committee, the court will order a replacement committee. In the meantime, the Public Trustee is the default committee.
Fees and Expenses
At the time of the passing of the committee’s accounts, the Public Trustee determines the fee that the committee is entitled to based on the work performed and the success obtained. The fee may be set as a percentage of the value of the estate, or on an hourly or flat rate basis.
In addition, committees are entitled to reimbursement for reasonable and proper out of pocket expenses, including the legal costs of the application for their appointment as committee and the cost of the surety bond premiums if ordered by the court.