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Elder Mediation - Planning for Incapacity

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A general outline of the legal framework behind incapacity planning.

A general outline of the legal framework behind incapacity planning.

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  • 1. Elder Mediation and Legal Issues: Planning for Mental Incapacity 2010 World Summit & Symposium on Elder Mediation By: Nicole Garton-Jones, Lawyer & Mediator
  • 2. Planning for Incapacity
    • An overview of the legal context in which incapacity planning occurs and the available tools for incapacity planning with respect to:
    • (1) financial and property matters; and,
    • (2) health care and personal care.
  • 3. Where There Is No Plan
    • The need for incapacity planning is often brought into focus for a client when the alternative is considered;
    • Where there is no plan for incapacity, clients and their families must rely on the various statutory regimes that fill the void;
      • In BC, for financial and property matters this is currently the Patients Property Act , R.S.B.C. 1996, c. 349 (the “ PPA ”), while for health care and personal care there is the PPA and the Health Care (Consent) and Care Facility (Admission) Act , R.S.B.C. 1996, c. 181 (“ HCCFA ”);
    • While these statutory regimes may be sufficient for some clients, others may be surprised by the results and seek to take a different route.
  • 4. No Plan: Property & Financial Matters
    • In the absence of an enduring power of attorney, representation agreement, trust or a joint account, an incapacitated person’s assets are inaccessible;
    • Land held in joint names cannot effectively be dealt with and bills cannot be paid;
    • In such circumstances, a relative, friend or the Public Guardian and Trustee (the “PGT”) must apply to the court for a committeeship order as to the person’s estate, person or both;
    • if the matter becomes contested by either the patient or by another interested party as to the declaration of incapacity the matter can be converted to a trial ( PPA, s. 3(2)). There can also be adversarial contests between competing family members and others as to the proper committee;
    • Once a committee is appointed he or she is subject to accounting obligations to the PGT and ultimately the personal representative or beneficiaries of the patient’s estate ( PPA , ss. 10 and 24).
  • 5. Benefits of Having No Plan for Financial Incapacity
    • The primary benefit to taking no steps to plan for financial incapacity is that there is no immediate cost to the client.
    • The other major benefit is that the client can avoid the need to choose among potentially competing persons and does not need to give current control of his or her assets to another person;
  • 6. Drawbacks of Having No Plan for Financial Incapacity
    • Guardianship/committeeship process is slow even where unopposed;
    • Expensive;
    • The client has no control over who will ultimately manage his or her affairs as committee;
    • involvement of the government agencies and the court in the affairs of the family;
    • The committee is limited on what may do with the patient’s assets;
    • The process can be fractious to a family;
    • In BC, committeeship is either on or off. A committeeship can only be obtained when capacity is lost, not when it is diminishing.
    • Accordingly, there is often a period where a person may benefit from assistance even though they may retain a degree of legal capacity. Committeeship cannot respond to this issue.
  • 7. Heath Care and Personal Care
    • Unlike the financial and property matters situation, where a person is incapable of making health care decisions, there is a statutory plug in BC to fill the gap in decision making authority without the need for the Court’s intervention;
    • Where no representation agreement has been made, the HCCFA does allow health care providers to choose a temporary substitute decision maker (“TSDM”) who is able to give, refuse or revoke consent to health care on an incapacitated person’s behalf ( HCCFA , s. 16);
  • 8. Benefits of Having No Plan for Health Care and Personal Care Incapacity
    • the primary benefit of not planning for health care and personal care incapacity is avoiding the current expenses of making a plan;
    • also benefit to some of avoiding the need to choose among family and friends.
  • 9. Drawbacks of Not Having a Plan for Health Care
    • The client has no control over the ultimate decision maker chosen;
    • The decision makers authority may be limited in scope in terms of the health care provided and may not cover personal care;
    • the decision maker’s authority may be temporary;
    • Your health care wishes and values may not be met if no one knows in advance what you want.
  • 10. Planning Steps for Financial and Property Matters
    • Planning for incapacity can be broken down between financial and property and health care and personal care;
    • With respect to financial and property planning, the primary tools are enduring powers of attorney and inter vivos trusts;
    • Gifts and joint tenancy are also used, although these are often less desirable.
    • .
  • 11. Powers of Attorney
    • Regular (ends at point of incapacity)
    • Enduring (continues past point of incapacity)
    • Springing (starts at point of incapacity)
    • Limited (for a specific time or purpose)
  • 12. Inter Vivos Trusts
    • where an inter vivos trust is created, it can be an effective tool for managing assets after incapacity
    • Where an inter vivos trust is settled by a client he or she can be the initial trustee, but can provide for a substitute trustee to assume control in the event of his or her incapacity.
    • The terms of the trust can provide for the benefit of the client during his or her lifetime and, depending upon the tax consequences, the client’s spouse, children and others.
    • On the client’s death the trust can provide for the distribution of the trust assets.
  • 13. Joint Tenancy and Gift
    • Clients sometimes seek to plan for incapacity by making gifts or placing assets such as bank accounts into joint tenancy. While such plans have the advantage of simplicity and inexpense, they are often misunderstood by clients and financial advisors;
    • Clients should be warned that if they make true gifts of property to children either outright or as joint tenants in order to allow the children to take care of the client in the event of incapacity, the clients may have exposed those assets to the child’s creditors and matrimonial claims;
    • As well, if the client and child fall out or after the client this can result in a dispute over the nature of the gift and leave the client in a financially precarious position.
  • 14. Planning Steps for Health Care and Personal Care
    • Representation Agreements;
    • Power of Attorney for Personal Care;
    • Health Care Directive;
    • Advance Directive;
    • Living Wills;
    • Nomination of Committee
    • Can be made in different ways (oral, written, gesture or formal document – varies in different jurisdictions)
  • 15. Incapacity & Elder Mediation Opportunities
    • Before, during and after incapacity planning;
    • In the instance of no incapacity planning (guardianship mediation);
    • The 40-70 rule.
  • 16.
    • Thank you!
    • Nicole Garton-Jones, B.A., LL.B.
    • The Village at Park Royal
    • 203 – 815 Main St.
    • West Vancouver, BC V7T 2Z3
    • Direct: 778-786-0615 ext.111
    • Email: nicole@bcheritagelaw.com
    • Website: www.bcheritagelaw.com

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