Several years ago, in a client presentation, a lawyer stated that your Enduring Power of Attorney document may be more important than your Will.
At that time, I did not realize how important their statement was. Since then, I have known a few clients who have become a family member’s legal representative as appointed by the court. I have learned how difficult it is and how much easier it would have been if the individual had completed an Enduring Power of Attorney document ahead of time.
Most people, when they think of estate and legal documents they need to have in place, the first item they think of is their Will. But maybe it is more important to name a legal representative in case you need someone to act on your behalf while you are alive.
If you are unable to look after your financial affairs, who will act on your behalf? If you do not have a legal document like a properly executed Enduring Power of Attorney (EPA) document, it can become complicated and expensive and takes a long time to get in place.
If you lose mental capacity, for example, due to dementia, or are temporarily or permanently unresponsive or unconscious due to injury in a motor vehicle accident or freak accident or serious illness, who will operate your bank account? Who will pay your bills? Who will apply for disability income benefits? Your financial transactions need to continue, but who will look after this for you?
The appointment of a Committee of property may be necessary if a person becomes mentally incapable of managing their own affairs without having made arrangements while competent. For example, if a person, while competent, signed an EnduringPower of Attorney that gave another person authority to manage their financial affairs in the event of mental incompetence, a Committee might not be necessary. However, if no such arrangements were made, banks or credit unions or other financial institutions might require the appointment of a Committee with legal authority to deal with the person’s assets.
What is a Committee?
If you do not have anEPA document, then someone close to you like a family member or close friend can apply to the courts to be your legal representative. It is called a Committee (sounds like“comma-tea”; it is pronounceddifferently from the normal definition of committee (come-mitt-tea), like a board of directors).
A Committee is a person (or persons) including The Public Guardian and Trustee (PGT) appointed by The Court of King’s Bench to make decisions for a person who has been found to be mentally incapable of handlingtheir own financial affairs. The PGT is appointed by the court only as a last resort where there is no one else willing, able, or suitable to act.
Any person who lives in Manitoba may apply to be a Committee. Usually, the person applying is a close relative or friend of the person requiring a Committee. In some cases, a trust company may apply to be the Committee, particularly where the person’s estate is large and professional financial management is required.
A Committee must be a resident of Manitoba because Manitoba courts do not have jurisdiction outside the province.
More than one person may be appointed to act as Committee. If joint Committees are appointed, and one dies, the survivor may continue acting. The court may also appoint an alternate Committee to act in the event of the temporary absence or death of a Committee.
To become the Committee, you need to apply through the courts, and you need the assistance of a lawyer to do this. This is expensive and time consuming.
The one situation I am most familiar with,the cost to be appointed the Committee was about $3,000 for the lawyer fees. And each year for the first few years, a formal financial statement must be presented to the court. This involves someone like me to put together the prescribed financial statements (about $1,000 per year) and the lawyer fees to present it to the courts; that is another $1,500 per year. Now we only have to present the financials every two years. But that is still $2,500 every two years!
And while getting the appointment of Committee took many months, the family paid some of the home operating expenses out of their own pocket; would a family member be able to do this for you?
It would have been way cheaper to pay a lawyer for an EPA document, even if the cost may be $250-500.
I recently had a family attend my office who are familiar with a family who required a Committee appointment. They do not want to go through that. So, both parents and their adult child now have all the documents they need: EPA, Will, and Health Care Directive.
Public Guardian and Trustee
The Committee can be someone like a family member, but if no one steps up to be appointed by the courts, then the Public Guardian and Trustee of Manitoba (PGT) may step in as a last resort.
The PGT’s mission is to protect the interests of Manitobans by providing professional andcost-effective trustee services of last resort that meet the needs of its clients.
Government employees will now look after all of your finances including paying your bills and deciding where you should live.
The PGT is very impersonal. A private Committee would be more personal and may be able to make decisions for you that you would have wanted about your finances including where you live.
But if you want the best personal decisions made for you, you need an Enduring Power of Attorney and appoint someone of YOUR choosing.
PGT is often an individual’s Committee if they were born with a mental disability and never have been able to manage their own financials affairs. Once they turn 18, these individuals receive monthly income from Employment and Income Assistance (social assistance or welfare). They may live in the community with foster families or with their own parents. And their legal representative is normally the PGT; the PGT manages their finances and looks after their personal income taxes each year.
Enduring Power of Attorney
Sometimes, people who are mentally capable of managing their own propertyneed help to do so. They may be physically incapable of doing their bankingand other errands and need someone with legal authority to do those thingsfor them.
EPAs are excellent tools formentally competent adults to use to plan for a time when they are not able tolook after their own financial affairs or property.The person who signs the EPA is called the donor or grantor. An EPA is a type of power ofattorney (POA) that allows the attorney to continue acting even if the donor laterbecomes mentally incapable of managing their own property.
Get your EPA property created and executed now. We never know when we may lose our mental capacity in the future due to accident or illness or dementia.
Most people as they get older, realize they need an EPA and pay a lawyer to get it in place so then they have peace of mind.
But all adults need an EPA. Young people can also be in a motor vehicle accident and lose mental capacity; even in a medically induced coma. They can also have a freak accident at home and become temporarily or permanently unresponsive.
Give the gift of an EPA. If you have adult children, a great gift to them would be to pay for the lawyer to draw up a proper Enduring Power of Attorney. As their situations changes and they get older, they can replace the EPA with new ones as they need new legal representatives to replace previously appointed ones that may no longer be suitable due to death, age or illness, or if they move away from the area and someone else may be more suitable.
If you already have an EPA, pull it out (or the copy) and review it. Are the named individuals still suitable? And are they still willing and able?
Your Experiences?
If you have had experiences with being a Committee for a family member or know someone who had the PGT become an individual’s Committee, I would like to hear from you. Please call me or email me with your experience. If I am able to share some of your experiences anonymously and with your permission, these stories may prompt individuals to ensure they get their own EPA in place or encourage their adult children to have Enduring Power of Attorney; and maybe even pay for it!
Canadian Dental Care Plan – Seniors, Disability,Children
Have you received dental services and had the new Canadian Dental Care Plan pay for some or all of the costs? Let me know how it went. Is it working as you expected? Good experience? Or did you have problems? I would like to hear about your experiences: the good, the bad, and the ugly.
Anni Markmann is a Personal Income Tax Professional and Certified Financial
Planner; living, working, and volunteering in our community. Contact Ste
Anne Tax Service at 204.422.6631 (phone or text!) or 36 Dawson Road in
Ste Anne (near Co-op) or info@sataxes.ca