Enduring Powers of Attorney in New Brunswick: Where We Are and Where We’re Going

June 9, 2020

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.

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