Pre-planning is something we enjoy doing when it comes to fun activities like a weekend at the lake. However when it comes to planning for death or incapacity, we tend to avoid it. We busy ourselves with the here and now, and leave those problems for later.
Fast-forward to later. You are in your late seventies. The stairs in the family home are too much for your hip and your spouse suffers from dementia. You want to sell your home and you know your spouse is no longer capable of understanding that legal process, but you figure since you are joint owners you can handle everything and sign on behalf of your spouse. This is a common misunderstanding. You have no legal authority to sign legal or financial documents on behalf of your spouse, even if you are co-owners of the house. You need a Power of Attorney to sign legal/financial documents for your spouse.
Thus, unless your spouse granted a Power of Attorney to you (or someone else) while they were mentally capable, the only way you will be able to sell your home is to apply to a Court for a Committee Order over your incapable spouse. The Judge will need evidence that your spouse is incapable of handling their affairs, in order to declare your spouse incapable and appoint you as the legal representative. After this costly and time consuming process, you would finally be able to sign the legal sale documents, on behalf of your incapable spouse.
This E-bulletin will briefly overview the Committee process, but the most important point you should take-away is this: the whole process can be avoided if you make a Power of Attorney, while you are still capable.
What is a Committee?
A Committee is a person appointed by the Court to make decisions for an adult who is mentally incapable of making those decisions for him or herself.
Two types of Committees can be appointed depending on the incapacity of the adult:
- A Committee of Estate (to make financial and legal decisions on behalf of the adult) and
- A Committee of the Person (to make personal and medical decisions on behalf of the adult).
In most cases, both types of Committees will need to be appointed.
The adult who has lost capacity is referred to as the “patient”, and the person applying to become a Committee is the “Applicant”.
Applying to become a Committee (the “Applicant”)
Who can apply?
Any person, including the Public Guardian and Trustee (the “PGT”) as a last resort, may apply to the British Columbia Supreme Court for an order declaring that an adult is incapable and that the Applicant be appointed as Committee. This can result in contested applications if 2 or more persons feel they should be appointed, or if someone feels the Applicant should not be appointed.
The Court will consider the best interests of the Patient when making the decision of whom to appoint as Committee.
What documents are needed?
Medical evidence is needed from two physicians who are of the opinion that the patient is incapable of managing his/her affairs. An Applicant must also disclose to the Court information about the patient’s age, living situation, family and financial situation along with a proposed care plan, if there is one.
Who needs to know?
The court documents must be served on the patient as well as any persons who may be affected by the order, such as next of kin.
The PGT must also be served with the materials, and they may give input to the Court as to whether the Applicant should be ordered to post security (such as a security bond), or that the Court place restrictions on how the Applicant can deal with assets (which can cause additional costs and headaches for the Applicant).
Duties & Responsibilities of a Committee
A Committee has almost all the rights, privileges and powers that the Patient would have if they had capacity. Of course, the Committee cannot make, change nor revoke a Will on behalf the Patient.
A Committee must exercise its powers for the benefit of the Patient and their family, and this includes fostering independence to any extent possible. A Committee is not permitted to use or receive benefits from their position as Committee. A Committee must always place the Patients interests ahead of their own and their interests must never conflict.
A Committee must keep accurate records of all expenses paid on behalf of the Patient, because the Committee must provide an “accounting” to the PGT whenever the PGT requests. The PGT will assess the reasonableness and necessity of any expenses occurred by the Committee on behalf of the Patient.
A Committee may be permitted reasonable compensation from the Patient’s estate for services rendered. The PGT will fix the amount of remuneration upon the passing of accounts.
Remuneration is based upon numerous factors which include the value of the assets in the Patient’s estate, how much work and responsibility is required from the Committee, the length of the appointment, how well the Committee performs their duties, and if the Committee has engaged in any extraordinary services for the Patient.
The associated costs, such as legal fees, doctor’s fees for preparing evidence, the security bond and Committee remuneration, are all usually appropriate to be paid from the Patient’s estate.
This process is an expensive and time consuming last resort, available when no other provisions have been put in place to plan for incapacity. It is much easier, cheaper and better to make sure that incapacity planning is done early and done well.