As we all age, many adults have financial and medical concerns relating to their care as they become older. Portfolio managers who prepare estate plans for their clients should address many of these concerns.
Having capacity in managing your own affairs is the cornerstone of estate planning and why we encourage people to plan early. If someone becomes incapacitated, then they lack the ability to sign legal documents.
One legal document that covers health care is called a Representation Agreement.
What is a Representation Agreement?
A Representation Agreement is a legal planning document for health care matters. It is the only way in British Columbia to choose and authorize your decision maker for health care. A representative has authority to help you make your own decisions, assist you with decisions or, if necessary, make decisions on your behalf.
A Representation Agreement can cover personal care matters, which are often closely related to health care as well as routine financial decisions.
Types of agreements
In B.C., there are two types of Representation Agreements: A Standard (Section 7) Representation Agreement and an Enhanced (Section 9) Representation Agreement. Throughout this article we will refer to these as Standard and Enhanced agreements.
Who can make a Representation Agreement?
There are two determining factors on who can make a Representation Agreement. First is the age requirement. You must be 19 years of age or older. The second requirement is the capability requirement.
In B.C., there are two approaches to capability. With an Enhanced agreement, you must meet the traditional definition of capability, which states that you must understand the nature and consequences of decisions of the legal document at the time of making them.
A Standard agreement takes a different approach to capability. A person may still make a Standard agreement even if they do not meet the traditional capability requirements to make an Enhanced agreement. In deciding this, all relevant factors need to be considered, such as:
• Whether the adult communicates a desire to have a representative make, help make, or stop making decisions.
• Whether the adult demonstrates choices and preferences and can express feelings of approval or disapproval of others.
• Whether the adult is aware that making the representation agreement or changing or revoking any of the provisions means that the representative may make, or stop making, decisions or choices that affect the adult.
• Whether the adult has a relationship with the representative that is characterized by trust.
There is no requirement for a legal professional to make either type of Representation Agreement as well as no requirement for a medical assessment.
Standard (Section 7) Representation Agreement
As discussed above, this agreement can be made by a person over the age of 19, even if they have some trouble understanding information. A Standard agreement is typically used by people who have lost some of their mental capacity and deals with the routine decisions in your everyday life. Some items that a Standard agreement can help you with are:
• Health care decisions about treatments and procedures related to your health, such as surgery, medication, and/or vaccines.
• Personal care decisions regarding your daily life like where you live, diet, exercise, and clothing.
• Routine financial decisions such as paying bills, making investments, and depositing income and making purchases necessary for personal care.
• Legal decisions like obtaining legal services for you (except for making a Will or a divorce).
Representatives may not:
• Make or help make a decision to refuse health care necessary to preserve life.
• Physically restrain, move or mange the adult.
• Authorize another person to restrain, move or manage the adult.
Learn more about the full scope of what a Standard agreement covers, you can read the .
Enhanced (Section 9) Representation Agreement
An Enhanced agreement gives the representative more comprehensive powers when it comes to health care and personal care decisions. An Enhanced agreement gives the representative the authority to do anything that the representative considers necessary in relation to the personal care or health care of the adult. Some of these decisions include:
• Deciding where the adult lives, including whether it should be a care facility.
• Deciding whether the adult should work and what type of work.
• Deciding whether the adult should have contact with other people.
• Day-to-day decisions on behalf of the adult.
• Give or refuse consent to health care.
• Physically restrain, move, or manage the adult.
• Authorize another person to restrain, move and manage the adult.
Representatives may not:
• Make arrangements for the temporary care and education of the adult’s minor children or anyone else who is cared for or supported by the adult.
• Interfere with the adult’s religious practices.
With an Enhanced agreement, if a representative is provided the power to give or refuse consent to health care, the representative may give or refuse consent to health care necessary to preserve life.
One thing to note is that an Enhanced agreement does not include any authority related to finances. This would typically be covered by a , which often is used in combination with an Enhanced agreement.
To learn more about the full scope of what an enhanced representative can and cannot do, go to the .
Who to name?
Given the authority provided by a Representation Agreement, it is important to name someone you trust. Typically this would include a spouse, adult children, or a trusted friend. Whoever you name, what is critically important is that they know your wishes and desires when it comes to your health care and personal care.
Having a Representation Agreement in place is an essential part of any estate plan. Knowing and understanding the powers granted to your representatives is important. What is most important is that whoever you name as your representative, that they know your wishes and desires regarding the health care decisions, so that when you are not able to make those decisions for yourself, your representative can make them for you.
Kevin Greenard CPA CA FMA CFP CIM is a Senior Wealth Advisor and Portfolio Manager, Wealth Management with The Greenard Group at Scotia Wealth Management in Victoria. His column appears every week at timescolonist.com. Call 250-389-2138, email [email protected], or visit .
