“I want my attorney to act under my enduring power of attorney only after I become incapable of making financial decisions – why does my document say they can begin acting while I’m capable?” This is one of the most common questions we receive from clients when they review their enduring powers of attorney (“EPAs”).
Two kinds of EPAs are recognized under British Columbia law – a continuing EPA and a springing EPA. (In Ontario and some other provinces, “continuing power of attorney” is the name used for the equivalent to BC’s enduring power of attorney, but in this article we use the term “continuing” to distinguish one category of enduring power of attorney from another). If you make a continuing EPA, you authorize your attorney to act while you are capable, and that authority continues if you become incapable. In contrast, a springing EPA causes the attorney’s authority to spring into existence when you become incapable. British Columbia’s Power of Attorney Act, in section 14, requires each enduring power of attorney to specify whether it is a continuing EPA or a springing EPA. Most people think they want a springing power – they don’t like the thought that their attorney could be acting for them while they are still capable of making their own decisions. However, lawyers will almost always recommend a continuing EPA instead.
The reason why continuing powers of attorney are usually preferred becomes clear when you consider the EPA from the point of view of the person who will eventually rely on it. Imagine you work at a bank. The adult child of one of your customers brings in an EPA for her mother and asks to be added as an authorized person on the mother’s account. On reading the document, you find it is a springing EPA that takes effect only when the mother is incapable. This means you need to verify the mother’s incapacity before you can accept the EPA. The springing EPA might say how incapacity is to be established – for example, by opinion letters from two qualified physicians. If that was the case, you would send the attorney to get those opinions, which will cost them weeks of time and frustration, not to mention physicians’ fees not covered by insurance. Assuming the doctors can provide the opinions and you eventually receive them, your legal department will still have to review them to ensure they meet the test set out in the EPA, which takes more time. If the EPA had instead been a continuing EPA, you could have accepted it as valid in the first case with no additional steps.
Another reason continuing powers of attorney are preferred is that many older adults require assistance in managing their financial affairs long before they would be considered legally incapable. For example, adults with a progressive neurodegenerative disorder such as dementia may encounter confusion and day-to-day forgetfulness despite remaining very capable of understanding their financial affairs in more general terms. If an EPA cannot be used until the point of legal incapability, it may prevent the adult from receiving needed assistance from a trusted person.
So if you make a continuing EPA, how can you ensure it is not used prematurely? One method is to give the EPA to your attorney, and simply ask them not to use it until you agree or they believe you are incapable. If you don’t trust them with the authority to make this decision in your best interests, you might question whether you are appointing the right person to be your attorney. Another common method is to lodge your EPA with your lawyer along with a letter that authorizes release to your attorney in specific circumstances. This method essentially allows the EPA to “spring” into effect for all intents and purposes, despite being “continuing” on its face to ensure easy acceptance by third parties.