What Your Attorney Can and Can't Do Under a BC Enduring Power of Attorney

An enduring power of attorney lets someone you trust handle your financial and legal affairs, including after you lose capacity. That is a lot of authority, and BC's Power of Attorney Act puts rules around it.

Whether you are making an enduring power of attorney or have just been named as an attorney, it helps to know where the lines are. This guide covers the attorney's duties, the limits on gifts, loans and compensation, the record-keeping rules, and what happens if something goes wrong.

What an attorney is allowed to do

An enduring power of attorney lets you authorize an attorney to make decisions, or do anything you could lawfully do through an agent, in relation to your financial affairs. Under the Power of Attorney Act, "financial affairs" includes your business and property and the conduct of your legal affairs. You can grant broad general powers or limit the attorney to specific tasks (s 13).

An enduring power of attorney covers money and property only. It does not cover health care or personal care decisions; those are dealt with by a representation agreement. Our article on powers of attorney versus representation agreements explains how the two fit together.

If you name more than one attorney for the same area, they must act unanimously unless the document says otherwise, for example by naming one as an alternate or explaining how disagreements are resolved (s 18(5)).

The attorney's core duties

Section 19 sets out what every attorney must do. An attorney must:

• Act honestly and in good faith.
• Use reasonable care. Exercise the care, diligence and skill of a reasonably prudent person.
• Stay within their authority under the document and the law.
• Act in your best interests, taking into account your current wishes, known beliefs and values, and any directions in the document.
• Put your care first. To the extent reasonable, give priority to meeting your personal care and health care needs.
• Invest prudently. Unless the document says otherwise, invest only in accordance with the Trustee Act.
• Involve you. To the extent reasonable, foster your independence and encourage your involvement in decisions.
• Respect your will. Not dispose of property they know is the subject of a specific gift in your will, unless that is necessary to meet their duties.
• Keep your property separate from their own, except property you own jointly with the attorney, unless the document says otherwise.

An attorney also cannot delegate their decision-making authority unless the document allows it, although they may hire qualified people to help and may delegate investment management in line with the Trustee Act (ss 20(4), 23).

Gifts and loans

This is where many disputes start. Under s 20, an attorney may make a gift, loan or charitable gift from your property only if the document permits it, or if all three of these conditions are met:

• you will still have enough to meet your own and your dependants' personal care and health care needs and your other legal obligations,
• you made gifts or loans of that nature yourself when you were capable, and
• the total of all gifts, loans and charitable gifts in a year does not exceed the prescribed limit.

The Power of Attorney Regulation sets that limit at the lesser of 10% of your taxable income for the previous year and $5,000.

An attorney can receive a gift or loan only if the document permits it, and any permission must be express. If you want your attorney to keep helping a family member, or to continue regular donations, say so clearly in the document.

What an attorney cannot do

• Make or change your will. An attorney must not make or change a will for you, and any attempt has no effect (s 21).
• Freely change beneficiary designations. An attorney can change a designation you made, for example on an RRSP or insurance policy, only if the court authorizes it. They may create a new designation only when renewing or replacing a similar plan and naming the same beneficiary, or when naming your estate (s 20(5)).
• Pay themselves without authority. An attorney cannot be compensated unless the document expressly authorizes it and sets the amount or rate. They can be reimbursed for reasonable expenses properly incurred (s 24).
• Obtain your will against your instructions. Someone holding your will must not give it to your attorney if you, or the will, instructed that it not be delivered to them (s 20(7)).

Records and accountability

The regulation requires an attorney to make a reasonable effort to identify your property and debts when they first act, and to keep a current list of property and liabilities, accounts of what they do, and the invoices and bank statements needed to produce full accounts. The attorney must produce those records for inspection and copying at your request (s 19(1)(d)).

If you are incapable, an attorney may act despite your objections, but still subject to the duties to consider your wishes and involve you (s 27(2)). If someone believes an attorney is abusing their position or failing to follow the document, anyone may report it to the Public Guardian and Trustee, which can investigate (s 34). An attorney may also apply to court for directions about the scope of their powers (s 36).

An attorney's authority can also end automatically, for example if the attorney is your spouse and you separate, unless the document says it continues (s 29).

Drafting choices that prevent problems

Most attorney disputes come from silence in the document. When you make an enduring power of attorney, think about:

• when it takes effect, and who confirms incapacity if it starts later,
• whether gifts, loans or support for family members are permitted, and within what limits,
• whether your attorney will be paid, and how much,
• how co-attorneys make decisions and who steps in as an alternate, and
• whether you want regular accounting to another family member.

If you have received a dementia diagnosis, it is important to put these documents in place while you still have the capacity to make them.

Making an enduring power of attorney? Put clear instructions in writing

Our wills and estate planning lawyers can prepare an enduring power of attorney with clear instructions on gifts, loans, compensation and when it takes effect, and advise attorneys on their duties once they begin to act.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.