Taking Care In a COVID-19 World
For the past couple of months, not a day goes by without us all hearing or reading numerous messages urging us to take particular precautions to care for our own health and that of our family, friends and communities in the midst of the coronavirus pandemic. The circumstances are providing stark reminders of the vulnerabilities, not only of our health, but also of our plans, incomes and asset values.
Fortunately, we are not powerless to respond. We are all taking precautions and foregoing important activities to protect our own health and that of others. We can also take proactive steps to safeguard ourselves and our loved ones economically. At the base of all good planning is reliable information.
Our lawyers have expertise and years of experience in advising clients and assisting them in documenting and implementing their business and personal plans. This article is about personal planning. There are strategies and legal documents to protect you during your lifetime and your estate and family at death. Here is a useful chart provided by nidus.ca illustrating the most common planning documents.
in British Columbia, a Power of Attorney is a document made in writing with certain formalities to grant someone else (or more than one) the authority to handle financial or legal matters for you. It does not remove your authority to handle your own affairs. It is given in writing, can be revoked in writing, ends at your death and, unless you state otherwise, ends when you cease to be mentally capable. But most people want the Power of Attorney exactly in case they are incapable of doing their own business. Thus, most people choose the Enduring Power of Attorney (see above illustration) which continues in force even when you become incapable. The Enduring Power of Attorney may include or prohibit certain actions by the Attorney, such as authority to make loans or gifts from your money.
Distinct from Powers of Attorney, which only cover financial and legal matters, are Representation Agreements which derive their authority in British Columbia from the Representation Agreement Act. Other provinces have similar provisions for documents by other names (so be careful with what you find on the internet.) Representation Agreements are documents by which an adult may appoint one or more other people to help them with making decisions about health care and living arrangements. In case you become incapable, your appointed representative will make these decisions on your behalf, so you should choose carefully. On the other hand, if you do not have a Representation Agreement in place and you become incapable, someone will make these decisions for you – but not who you may have wanted to do so. As with Powers of Attorney, these documents are given in writing, can be revoked in writing, end at your death.
Adults with diminished mental capacity, which would prevent them from granting a Power of Attorney may be able to do a simplified form of Representation Agreement covering both basic financial and health matters. (See RA7 in above illustration.)
Wills and estates are governed by the Wills, Estates and Succession Act – as well as centuries of previous court interpretations of the legal principles affecting these. In British Columbia, a competent adult “of sound and disposing mind” (the “will-maker,” sometimes called “testator”) may make a valid Will appointing one or more other adults as executors to carry out the terms of the Will, describing the authority of the executors and setting our how the net estate assets are to be distributed to beneficiaries (heirs). The legislation sets out formalities about completing a valid Will and also contains some limitations requiring will-makers to make adequate provisions for their spouse and/or children. Will-makers with minor children will also want to appoint guardians for the children in their Wills.
Lawyers who take instructions from clients for the preparation of Powers of Attorney, Representation Agreements or Wills, have a legal and professional obligation to be satisfied that the person is an adult “of sound and disposing mind.” This means, among other things, you will be asked to produce valid picture ID and provide information about your spouse and children, if any, as well as your assets and liabilities. We must also ask you specific questions about your assurance that you completely trust those you choose to be your Attorney, Representative or Executor. This is not because we are nosy, but because proving you know these things is part of assessing “sound and disposing mind.” Also, some things such as jointly held assets, and assets which may have named beneficiaries such as life insurance, RRSPs, RRIFs, TFSAs and so on, pass outside the Will, but have tax and other consequences for your estate and should be considered in your planning.
There are other planning processes and documents we can assist you with such as corporate “estate freezes”, reorganizations, trusts or disability trusts which may be applicable to you or our family, but those are beyond the scope of this article. Processes for “probate” of Wills or administration of estates are also beyond the scope of this article, but can be addressed with your lawyer when making a Will or when you are an heir, beneficiary or executor of someone who has died.
Legal services are deemed “essential.” We remain open for business, despite COVID-19. We have temporarily suspended in-office appointments, but we have creative ways to continue to meet with our clients as needed. Reception remains open during office hours to receive couriers, mail and other correspondence. Thank you for your continued patience.
© Lorne Welwood, Linley Welwood LLP