Introduction
Powers of attorney are documents in which an individual (called a "grantor") can appoint another individual or individuals (called an "attorney") to make decisions on their behalf during their lifetime. Powers of attorney can be drafted to deal with decisions with respect to property matters and/or decisions with respect to personal care (i.e. health and medical) matters. An individual can create either of these types of powers of attorney on its own, or an individual can create both types of powers of attorney, in either separate documents or a single document.
A power of attorney is "enduring" if it explicitly
states it remains effective if the grantor lacks
"capacity". In this context, an individual lacks capacity
if they are not able to understand information that is relevant to
their decisions or appreciate the reasonably foreseeable
consequences of their decisions.
The purpose of this article is to provide an overview of New
Brunswick's current legislation with respect to powers of
attorney and highlight several important features of new
legislation coming into force in New Brunswick on July 1, 2020.
Existing Legislation
Currently, powers of attorney in New Brunswick are governed by multiple statutes: powers of attorney with respect to property matters are governed by provisions of the Property Act, RSNB 1973, c P-19; and powers of attorney with respect to personal care matters are governed by provisions of the Infirm Persons Act, RSNB 1973, c I-8.
Although outside the scope of this article, I note that in New Brunswick, advance health care directives - a concept related to (and often seen as an extension of) powers of attorney with respect to personal care matters - are also currently governed by a separate statute: the Advance Health Care Directives Act, RSNB 2016, c 46.
Practically speaking, the current statutes dealing with powers of attorney in New Brunswick create the basic framework to allow individuals to create powers of attorney, but they provide little guidance and direction for grantors creating powers of attorney, attorneys appointed as decision-makers in powers of attorney, and lawyers practicing in this area of law. Much of the advice lawyers presently provide to clients in relation to powers of attorney is based on practical, hands-on experience with respect to best (and worst) practices rather than being based on any detailed, statutory framework.
Incoming Legislation
On July 1, 2020, New Brunswick's Enduring Powers of Attorney Act, SNB 2019, c 30 (the "2020 Act"), comes into force. As the name suggests, this new act deals exclusively with powers of attorney that are enduring, and it will replace all matters with respect to enduring powers of attorney that are currently governed by the above-mentioned Property Act and Infirm Persons Act.
Again, while outside the scope of this article, I note the 2020 Act will also replace the above-mentioned Advance Health Care Directives Act. The 2020 Act allows an individual to include specific instructions with respect to health care - akin to a "health care directive" under the current legislation - directly in an enduring power of attorney with respect to personal care matters.
In addition, the 2020 Act appears to accomplish three main
objectives:
- it unifies the legislation applicable to enduring powers of
attorney in New Brunswick under a single statute;
- it adds significant detail to the requirements of, and the
structure for, enduring powers of attorney in New Brunswick –
the 2020 Act is much more comprehensive than the combination of its
predecessor statutes; and
- it codifies into law much of the practical advice, based
primarily on experience, that lawyers have been providing to
clients for years.
Highlights
For grantors of enduring powers of
attorney:
- Compensation: unless a grantor explicitly
states otherwise in an enduring power of attorney, an attorney is
not entitled to compensation for acting as an attorney (but an
attorney may be reimbursed for reasonable expenses incurred in that
role);
- Timing: a grantor may create an enduring power
of attorney that is effective immediately or a grantor may specify
a future date or situation upon which the enduring power of
attorney becomes effective. For example: in the context of property
matters, a grantor may specify that an attorney becomes authorized
to act at a specific time, when the grantor lacks capacity, or in
certain other fixed circumstances; and in the context of personal
care matters, a grantor may specify the individual responsible for
determining when the grantor lacks capacity, at which point the
attorney will be authorized to act;
- Notice: a grantor may specify certain
individuals to whom an attorney must provide notice before the
attorney begins acting pursuant to an enduring power of attorney;
and
- Monitors: a grantor may name a
"monitor" to oversee an attorney's actions. A monitor
named in an enduring power of attorney is entitled to communicate
and meet with the grantor, to request records and information from
an attorney, and to apply for a court order in the event an
attorney is not acting appropriately or acting outside the
authority granted to them in the enduring power of attorney.
For attorneys appointed in enduring powers of attorney:
- General Duties: an attorney must act honestly
and in good faith, exercise reasonable care, and act within the
authority given to them in the enduring power of attorney. An
attorney must also act in accordance with the grantor's wishes,
or in the absence of specific wishes, in accordance with the
grantor's best interests;
- Maintaining Records: unless the enduring power
of attorney specifies otherwise, an attorney must keep accurate
records and provide them, on request, to the grantor, to any
monitor named in the enduring power of attorney, to any other
attorney(s) named by the grantor, and to the executor or
administrator of the grantor's estate;
- Effect of Separation: unless the enduring
power of attorney specifies otherwise, if the grantor and the
attorney are spouses or common-law partners, and they separate, the
attorney's authority to act pursuant to the enduring power of
attorney terminates; and
- Limitation of Authority: unless the enduring
power of attorney specifies otherwise, an attorney cannot make
gifts on behalf of the grantor nor delegate their authority to
another individual. An attorney also cannot make, alter, or revoke
a last will and testament on behalf of the grantor; however, unless
the enduring power of attorney specifies otherwise, an attorney can
make beneficiary designations on behalf of the grantor in certain
circumstances.
General:
- Guidance (Financial Institutions): financial
institutions may decline to follow instructions given by an
attorney and suspend or restrict a grantor's accounts if the
financial institution reasonably suspects an attorney is not acting
in accordance with the 2020 Act. The 2020 Act also imposes a
positive obligation on financial institutions to notify the
grantor, the monitor (if any), and any other attorney(s) named in
the enduring power of attorney if the financial institution has
concerns about an attorney's actions; and
- Scope: the 2020 Act will impact more than
enduring powers of attorney created in New Brunswick on or after
July 1, 2020. The 2020 Act is drafted so that any powers of
attorney drafted before July 1, 2020, in accordance with either the
above-mentioned Property Act or Infirm Persons Act, will be
considered enduring powers of attorney under the 2020 Act. The 2020
Act will also apply to foreign documents being exercised in New
Brunswick, if in the foreign document an individual appoints
another individual to act on their behalf with respect to property
matters and/or personal care matters when they lack capacity.
Conclusion
The 2020 Act represents a significant change in how enduring powers of attorney will be prepared, granted, and acted upon. The 2020 Act will necessarily lead to adjustments by grantors of enduring powers of attorney as well as by the attorneys appointed therein. Lawyers practicing in this area will also need to update their practices and modify the advice they provide to clients.
As mentioned above, the 2020 Act is broad in scope and in application. It will be important for grantors, attorneys, and lawyers who deal with enduring powers of attorney to be aware of the 2020 Act, whether the documents they are dealing with are prepared before or after July 1, 2020, and whether the documents are drafted in New Brunswick or elsewhere. If the document is exercised in New Brunswick, the 2020 Act will apply.
Please contact us if you have questions or would like to discuss these matters in more detail.
Originally published 9 June 2020
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.