In 2000, new estate planning laws increased the ability for British Columbians to plan for a potential future disability through injury or illness. Using a new type of agreement, called a Representation Agreement, you could make legally valid instructions for another adult to manage not only your financial, property and legal matters, but also your health care and medical matters. Traditional enduring powers of attorney (useful only for property, financial and legal matters) were scheduled to be phased out.
While the opportunity to make legal plans for future health care and medical needs was widely embraced and long overdue, the legal and financial community were concerned about the proposed cancellation of enduring powers of attorney. The new laws imposed significant restrictions on the financial powers that could be granted under a Representation Agreement. There was concern about the recognition of Representation Agreements outside B.C. Representation Agreements would be more costly to make.
In light of these concerns, the BC government commissioned a review of the effectiveness of Representation Agreements in relation to financial, property and legal matters. This spring the BC government published an information bulletin indicating that it accepts the recommendations and will revise the laws. As a result:
- Enduring powers of attorney will not be phased out, but will be the main planning tool to appoint someone to manage your financial, property and legal matters
- Representation Agreements will remain as the only planning tool to appoint someone to manage your health and medical needs
- Existing Representation Agreements that authorize a representative to manage financial, property and legal matters will remain valid
Powers of attorney are instruments that allow you to appoint another adult, called the attorney, to act on your behalf in relation to financial, property and legal matters. Powers of attorney can be very specific (for example, limiting the attorney’s authority to make bank deposits and bill payments only), or very broad (empowering the attorney to manage all financial, property and legal matters). Enduring powers of attorney are effective both before and after any loss of mental capacity and are by far the most common form of power of attorney made today. An enduring power of attorney is a simple, effective and inexpensive tool that should be considered in all estate plans.
If you have questions about your Power of Attorney or Representation Agreement, please contact us.