Revised July, 2001

Bulletin 2.1 - Enduring Powers Of Attorney

Enduring Powers of Attorney are deceptively simple agreements prepared under the Power of Attorney Act of British Columbia.

Under the common law, a Power of Attorney ceased to be legally effective when the giver (the donor) of the power became mentally infirm. The Power of Attorney Act addressed this problem about twenty years ago by permitting a provision in a Power of Attorney that it will remain effective subsequent to the mental infirmity of the donor if it contained words to that effect.

The Power of Attorney Act prescribes a simple one page document which provides the attorney with the power, "to do on my behalf anything that I can lawfully do by an attorney." It is possible to insert words limiting the authority of an attorney to a certain act or acts but such restrictions would not normally be appropriate for an Enduring Power of Attorney.

A Power of Attorney in the general form takes effect immediately upon signing and gives the attorney broad power over the assets and business affairs of the donor. For this reason Powers of Attorney are often held in trust by a law firm with a letter of authority authorizing release only where written instructions are received by the lawyer signed by certain persons, such as "all my children", "my physician", etc.

The Enduring Power of Attorney is a fairly primitive instrument which creates an agency relationship and not a trustee relationship. Examples of a trustee relationship are "executors of wills", "administrators of estates" or "committees" appointed under the Patients Property Act to manage the person and / or business affairs of an incompetent person. All trustees bear the highest legal duty to the beneficiaries, called a "fiduciary duty". The common law as well as the Trustee Act of British Columbia imposes many obligations on trustees including the obligation to keep adequate records and to produce adequate accountings of all transactions, receipts, disbursements, assets and liabilities.

The duty to keep records and the duty to account are not specifically imposed on attorneys under Powers of Attorney although the courts have found that the duty of an attorney, particularly under an Enduring Power of Attorney is a high and may approach a fiduciary duty.

The Representation Agreement Act (see Bulletin 2.2) purports to abolish Enduring Powers of Attorney but representations by the Bar have led to a an extension of these documents to September 2002. Currently, after September 1, 2002 it will no longer be possible to create an Enduring Power of Attorney and it will be necessary for an individual to incorporate business and asset management provisions in a "Representation Agreement".*

Enduring Powers of Attorney signed prior to September 1, 2002 will remain effective after that date.*

Our current advice is for all concerned clients to execute an Enduring Power of Attorney prior to September 1, 2002 and we suggest that in most cases these Powers of Attorney be held in trust by our firm to be delivered to the attorney only on receipt of the specific instructions contained in the letter.*

*Note: New Developments have occurred - please click here to view updates!

J.H. Rocke Robertson
Direct Line: +1 (604) 267-2814
E-mail: robertson@aydinco.com