Key Changes To PEI's Powers Of Attorney And Personal Directives

What it is

Substitute decision-making is what happens when a person is appointed by an individual (or by a court) to make or assist with decisions for that individual. Clients typically anticipate that this type of planning will be useful if they lose capacity to make decisions on their own. Substitute decision-making legislation has not been materially updated in many decades in PEI. With an aging population and a general need for more modernized and flexible substitute decision-making relationships, the legislative amendments outlined below are important for Cox & Palmer clients.

The Powers of Attorney and Personal Directives Act ("the PAPD Act") received assent on November 29, 2023 and comes into force on November 1, 2025, and the Powers of Attorney Act R.S.P.E.I. 1988 will be repealed on the same date.

Why is it Important

Previously, an individual (the "principal") could name an attorney to manage their financial affairs in a power of attorney ("POA") document, but could not appoint an individual to make personal decisions (such as nutrition, accommodations, socialization and other matters). The expanded PAPD Act permits an individual to now appoint someone to make personal decisions as well as financial decisions. Importantly, the appointment to make personal care decisions is only effective where the principal lacks capacity to make personal care decisions, and does not cover health care or treatment as set out in the Consent to Treatment and Health Care Directives Act.

In addition, there are many new functions of the PAPD Act that are helpful to, or provide protection for, individuals:

• A more robust definition of capacity;
• An express list of when an attorney can alter the designated beneficiary of a plan for the principal;
• The ability to name a person or persons who can compel (or who are not entitled to) an accounting by the attorney;
• A curing provision for documents not executed in accordance with the PAPD Act;
• A list of individuals who are not eligible to act as an attorney for a principal (undischarged bankrupt, person employed at a facility where the principal resides/received personal services or healthcare, has been convicted of a criminal offence within the last 10 years with some exceptions, or provides personal services or health care to the principal for compensation) and agent for personal care (person employed at a facility where the principal resides/received personal services or healthcare, has been convicted of a criminal offence within the last 10 years with some exceptions, or provides personal services or health care to the principal for compensation except as a family member);
• A detailed list of duties of an attorney, including a duty to engage the principal in decision-making to the extent possible;
• The ability to specify compensation for the attorney (note, no compensation is permitted for an agent for personal services);
• Specific instances where a POA or personal directive terminates;
• The requirement for a principal to notify an attorney or an agent that their authority has been revoked by the principal (eg. when the principal does a new POA appointing another individual);
• The ability for an immediate family member to require an accounting by the attorney if a person has not been named for this purpose in the POA;
• A mechanism for a court to order a service provider to take instruction from an attorney;
• Authorize the attorney to get a copy of the principal's will;
• And notably, a provision preventing individuals from contracting out of the Act!

What do I Need to Do?

The good news is that a power of attorney executed in accordance with the old legislation is deemed to be a valid power of attorney under the new legislation, so no panic should ensue.

However, the changes above might prompt some clients to want to re-visit their existing powers of attorney and and clients should now create a personal directive (because this was previously not possible).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.