When it comes to estate planning in British Columbia, the focus often falls on Wills, trusts, and the distribution of assets. However, a comprehensive estate plan should also include provisions for personal and financial decision-making if you become incapable of managing your affairs. This is where a Power of Attorney and a Representation Agreement come into play. While these two legal tools are often mentioned together, they serve different purposes and are governed by distinct laws in BC. Understanding the differences between them is crucial for ensuring your wishes are respected.
What is a Power of Attorney?
A Power of Attorney (POA) is a legal document that grants someone the authority to manage your financial and legal affairs on your behalf. This can include handling your bank accounts, paying bills, selling property, and making other financial decisions. The person you appoint to act on your behalf is called your “attorney,” though they do not need to be a lawyer.
In BC, a Power of Attorney can be either general or enduring:
- General Power of Attorney: This type of POA is typically used for a specific period or purpose, such as during your absence. It becomes invalid if you become mentally incapable.
- Enduring Power of Attorney: This type of POA remains valid even if you become mentally incapable, making it an essential tool for long-term estate planning.
What is a Representation Agreement?
A Representation Agreement is another crucial component of estate planning in BC, but it differs significantly from a Power of Attorney. While a POA covers financial and legal matters, a Representation Agreement allows you to appoint someone (a “representative”) to make personal and health care decisions on your behalf if you are unable to do so yourself.
There are two types of Representation Agreements in BC:
- Section 7 Representation Agreement: This is a standard agreement that allows for the appointment of a representative to make routine decisions about your personal care and minor health care matters. It is often used when the adult has diminished capacity but can still understand the nature of the agreement.
- Section 9 Representation Agreement: This is a more comprehensive agreement that allows your representative to make significant health care decisions, including end-of-life care. You must be fully capable when you sign this agreement.
Key Differences Between a Power of Attorney and a Representation Agreement
- Scope of Authority:
- A Power of Attorney focuses solely on financial and legal decisions. It does not cover personal or health care matters.
- A Representation Agreement covers personal and health care decisions, ensuring your medical care and living arrangements align with your wishes.
- Activation:
- A Power of Attorney, particularly an Enduring POA, can be activated immediately or only upon your mental incapacity, depending on your instructions.
- A Representation Agreement generally comes into effect only when you are no longer capable of making your own decisions.
- Legal Basis:
- A Power of Attorney is governed by the Power of Attorney Act of BC.
- A Representation Agreement is governed by the Representation Agreement Act of BC.
- Decision-Making Authority:
- An attorney under a POA cannot make personal or health care decisions for you unless they are also appointed as your representative in a Representation Agreement.
- A representative under a Representation Agreement cannot manage your financial affairs unless they are also appointed as your attorney under a POA.
Why You Need Both in Your Estate Plan
In BC, having both a Power of Attorney and a Representation Agreement ensures that all aspects of your well-being are covered if you become unable to make decisions for yourself. The POA handles your financial and legal affairs, while the Representation Agreement ensures that your health care and personal needs are met according to your wishes.
Without these documents, your loved ones may face significant challenges when trying to manage your affairs, and decisions about your care could be left to the courts. By proactively including both a Power of Attorney and a Representation Agreement in your estate plan, you can provide peace of mind for yourself and your family.
How Northam Law Can Help
At Northam Law, we understand that estate planning is about more than just distributing your assets—it’s about ensuring your overall well-being. Our team can help you draft both a Power of Attorney and a Representation Agreement tailored to your specific needs. Contact us today to ensure your estate plan is comprehensive and your wishes are protected.
Read other Frequently Asked Questions about Estate Planning:
What happens if I die without a Will?
Adding or removing someone from your property title – Pros and Cons
Can you disinherit a spouse or children in BC?
