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Planning for Incapacity - Representation Agreements
What is a Representation Agreement?
How does the Representation Agreement vary from the Power of Attorney?
What are the Transitional Provisions with respect to Enduring Powers of Attorney?
What kinds of Representation Agreements are there?
How are Representation Agreements signed?
Who do you appoint as a Representative?
Can a Representative be replaced?
Does a Representative have legal responsibilities?
How long does a Representation Agreement last?
What is a Monitor?
What is a Representation Agreement?
On February 28, 2000, our Provincial Government enacted four new Statutes known as the Adult Guardianship Legislation. One of those Statutes is the Representation Agreement Act, RSBC 1996 c. 405.
A Representation Agreement allows an Adult (over 19 years old) who has the mental capacity to do so, to appoint someone as his or her "Representative" to deal with the Adult's personal and health care issues, property and financial affairs, with a particular focus on the authority being exercised when the Adult cannot make his or her own decisions. The document forms an agreement between the Adult and the Representative, and if appointed, the Monitor.
Representation Agreements can be an important part of planning to deal with incapacity by ensuring as far as you can do so, that your wishes as to what happens with you and your property once you become incapable are carried out. They can also help prevent family arguments about how such things are dealt with.
How does the Representation Agreement vary from the Power of Attorney?
A Power of Attorney can only deal with property and financial matters. It cannot deal with personal and health care matters.
A Representation Agreement incorporates all the checks and balances contained in the Representation Agreement Act designed to prevent abuse, including Monitors B which will be discussed later and do not apply to a Power of Attorney. As well, there are a number of other statutory provisions, such as replacement of a representative, which do not apply to a Power of Attorney.
A Power of Attorney can be obtained for a relatively modest fee from a lawyer or notary public. A Representation Agreement will likely be considerably more expensive because of the expanded scope of the document and the increased complexities of signing it.
What are the Transitional Provisions with respect to Enduring Powers of Attorney?
After September 5, 2001 Enduring Powers of Attorney can no longer be made. Any Enduring Power of Attorney signed prior to September 5, 2001 will be grand-fathered and have authority according to it's terms until it expires according to law. After September 5, 2001 a Power of Attorney can still be granted, but it will not be an Enduring Power of Attorney and will expire upon the Principal becoming incapable of managing his or her own affairs.
What kinds of Representation Agreements are there?
There are two types of Representation Agreement.
The first type of Representation Agreement is a Standard Agreement, or a Section 7 Agreement. The Standard Agreement authorizes the Representative to deal with basic day to day health care decisions and basic day to day financial matters. These terms are defined in the Act. A lawyer does not necessarily have to become involved in the preparation or signing of a Standard Agreement.
The second type of Representation Agreement is an Enhanced Agreement or a Section 9 Agreement. The Enhanced Agreement can authorize a Representative to make decisions with respect to more complex health matters, including in particular life support decisions. The Enhanced Agreement also authorizes the Representative to make more substantial and complicated financial decisions, such as moving the adult or selling property or a business. The advice of a lawyer who also witnesses the Representative's signature is necessary for an Enhanced Agreement. A notary public cannot witness an Enhanced Representation Agreement.
How are Representation Agreements signed?
A Representation Agreement must be signed by the Representative in the presence of two witnesses. The Representative must sign a Certificate confirming that he or she is an adult, understands the agreement and will comply with the representative's duties. Each witness must also sign a Certificate indicating the witness is an adult, not a representative or and employee of or closely related to a representative, the witness understands the adult, and has no objections to the signing of the agreement, except as indicated. If one of the witnesses is a "person consulted" (ie. the lawyer), there is a special certificate.
If the Adult also appoints a Monitor (a person appointed to supervise the Representative), the Monitor must also sign the Agreement and a Certificate confirming that the Monitor is an adult, has read and understands the Representation Agreement and is aware of his or her duties and responsibilities under the Agreement and the Act, and is willing to exercise those duties.
Who do you appoint as a Representative?
A Representative is an adult who knows you and who you trust completely to carry out the duties and responsibilities set out in the Agreement. Obviously, the Representative will have to be willing to do so. Interestingly, an Attorney does not need to cooperate in the signing of a Power of Attorney.
You can appoint one or more Representatives, who can exercise all of the authority under the Agreement, or you can appoint more than one Representative who can deal with specific matters under the Agreement (for example, have one Representative deal with personal and health care matters, and another to deal with property and financial matters). You can also appoint alternate Representatives to take over in case your primary Representative is unable or unwilling to carry out his or her duties.
Can a Representative be replaced?
A Representative can die, resign or also become incapable. The Representation Agreement Act provides for the replacement of a Representative who is no longer capable of or willing to exercise the Representative's duties under the Agreement. The Representation Agreement can also provide for a substitute or alternate Representative.
Does a Representative have legal responsibilities?
The Representation Agreement imposes contractual duties on the Representative. The Representation Agreement Act imposes statutory duties of care on the Representative to actively perform his or her obligations under the Agreement in good faith. A Representative who does not actively carry out his or her duties under the Agreement is in breach of the Agreement or the Act is potentially liable to compensate the Adult or the Adult's estate for any loss or damage thereby suffered. The Act provides that so long as the Representative acts reasonably and in good faith in accordance with the Agreement, the Representative will not be liable for the consequences of decisions made. Of course what is reasonable can be a matter of interpretation.
How long does a Representation Agreement last?
A Representation Agreement can become effective on the date the Agreement is signed, or on a future date specified in the Agreement. It will expire on the death of the Adult or upon termination of the Agreement by the Adult in accordance with the Act.
In order for an Adult to terminate a Representation Agreement, the Adult must have the mental capacity needed to prepare and put the agreement into effect at first instance. The mental capacity needed to sign a Standard Representation Agreement is somewhat lower than that required for an Enhanced Representation Agreement or a Power of Attorney. A person can have the mental capacity to make a Standard Representation Agreement so long as he or she appreciates and understands that a Representative is being appointed to make decisions on such person's behalf and that he or she wants to sign the Agreement. The mental capacity to sign an Enhanced Representation Agreement is approximately the same test required to be met to sign a Power of Attorney or a Will, namely, the Adult also needs to understand and appreciate his or her financial and health situation and the rights being granted by the Agreement to the Representative.
Although it does not technically end the Agreement, a Representative or a Monitor can both resign. They can be replaced by the Adult or by Order of the Court.
What is a Monitor?
The Act requires that a Monitor be appointed for an Enhanced Representation Agreement, unless the appointment is specifically waived by the Adult. A Monitor is an adult person who is appointed by the Adult to supervise the Representative. The Monitor has an active duty to supervise and would be in breach of his or her statutory obligations to the Adult if supervision is not done.
If the Monitor (or for that matter, a witness to the Representation Agreement) becomes aware that a Representative is in breach of the Agreement or is failing to exercise the Representative's duties under the Agreement or under the Act, the Monitor is obligated to report the breach to the Public Trustee, and if the Monitor deems appropriate, to make an application to the Court to replace the Representative. A Monitor can also become liable to the Adult for any loss which is caused because of the Monitor failing to monitor. So long as the Monitor acts reasonably, the Act protects the Monitor from such liability.
A Representation Agreement can be a very useful document to use when planning for incapacity. It will become a necessity after September 5, 2001 when enduring Powers of Attorney can no longer be made. For more information about Representation Agreements and other aspects of the Province's adult guardianship legislation (including the actual Acts themselves) take a look at the Public Trustee's web site at http://www.trustee.bc.ca/. It has good information that you might find interesting and useful.
The foregoing is general information only and not intended to constitute legal advice. For that you should contact a lawyer of your choice to specifically address your needs and your situation. To that end, we certainly invite you to contact us.
ROY H. SOMMEREY
May 25, 2000
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