The Estate House

Getting her Rights Back

Several years ago, Flora L'Heureux had some medical problems.  Her issues were such that an application was made to have a Trustee and Guardian appointed to manage her finances, property, and to make personal care decisions on her behalf.  Since 2003, the Public Trustee has been acting in this capacity. 

Then Flora recovered.  She wanted to look after herself.  Unfortunately, current Alberta legislation made it somewhat difficult for her to do so.  She had to go to court to have herself declared compentent.  Yesterday, Madame Justice Veit of the Alberta Court of Queen's Bench ruled that Flora could regain control over her social life, education, and day-to-day activities.  The decision left control over her legal affairs, finances, and place of residence with the Public Trustee.  Flora then requested that a civil trial be held to determine whether or not she should have control over all of her affairs.  A decision from Justice Veit is expected today. 

Flora is backed the Elder Advocates Society of Alberta, who used the decision yesterday as an opportunity to call for a public inquiry into the Dependent Adults Act, the Personal Directives Act, the Powers of Attorney Act, and the Mental Health Act.  They argue that it is too easy for someone to be declared incapacitated under these acts.   

It is unfortunate that the society didn't do their homework.  In fact, the government is just completing a legislative review of the Personal Directives Act and the Dependent Adults Act and amendments to both of these Acts are currently before the legislature.  The proposed amendments include a revised, more extensive, process under the Dependent Adults Act for determining incapacity.  The amendments to the Personal Directives Act include a process for determining whether a maker has regained capacity.  Furthermore, the current procedure provides that orders made under the Dependent Adults Act must be reviewed, at a maximum, every six years.  When an order is reviewed, the applicant is obligated to provide evidence of the dependent adult's continuing incapacity.  If no such evidence is provided, the order may not be renewed. 

Business Succession Planning

This morning's edition of The Globe & Mail contains  an article discussing how the Irvings, one of Canada's richest families, are in the  midst of restructuring their corporate holdings as they determines the best way to hand the businesses down to the next generation.   The plan involves tax regimes in three different jurisdictions (Canada, U.S. and Bermuda) and countless business operations in industries such as forestry, energy and media. 

Kudos to the Irvings for recognizing the value in planning in advance.  Right now the main holding company - previously managed by K.C. Irving - is controlled by his three sons.  That management arrangement has worked relatively well for several years (disputes between the Irvings are not uncommon, but so far their businesses haven't been impacted by them), but now those sons are looking to cut back on their roles and there are five sons/cousins waiting in the wings.  The prospect for disputes among a five-member management team is much more likely than within a smaller group and so a decision to "deconstruct" the empire was made. 

But business succession planning is not just for families like the Irvings.   It is relevant to anyone who owns their own business, whether or not there is one or several employees.   I recently helped prepare an estate plan for a client who owns her own business.  It's relatively small and because it's a consultant-type business, most of the value is tied up in her personally.  However, she still has employees and clients that will need to be attended to should she die unexpectedly.  She wanted to make sure that her wishes for the business she had built were carried out. 

Contrast that with another file that came into our office briefly where the business owner died suddenly without a will, let alone a business succession plan.  Because there was no obvious administrator for his estate and no one to look after the business, issues soon arose with meeting the payroll and completing contracts started prior to his death.  Clients weren't happy, employees weren't happy and his family had to add these worries to the grief they were already experiencing as a result of their sudden loss. 

If you are a business owner, whatever the size, please make sure you have a succession plan in place.   Otherwise all of the work you've put into creating that business might be lost, and it's just not worth it. 

New Tool to Assist Wills & Estates Practitioners

This morning the National Wills, Estates & Trusts Section of the Canadian Bar Association released a Table of Concordance that compares estate planning legislation in the various Canadian jurisdictions.  It answers questions such as whether holograph wills are allowed, what the formal requirements for executing a will are, and what the standard for incapacity for a Power of Attorney or Personal Directive is in a particular province or territory.

Thank you to the National Wills, Estates & Trusts section for putting this together.  At this time it is only available to members of the Canadian Bar Association, but it will no doubt be valuable tool for practitioners across the country.

Personal Directives Amendment Act, 2007

When the new session of the Alberta legislature opens today, Monday, November 5, one of the bills scheduled to be dealt with is the Personal Directives Amendment Act.  

The Personal Directives Act was proclaimed in 1997, so it is fairly new legislation.  It allows individuals to appoint someone as their agent to make decisions of a non-financial nature on their behalf when they are no longer able to.  It also allows those individuals to set some guidelines for the types of decisions they want their agent to make.  It has worked very well as a relatively simple tool that can be done on your own or with a lawyer (of course we recommend going the lawyer route).   By having a proper Personal Directive in place, one can avoid the possibility of being the subject of a guardianship application, a procedure that can be time consuming and expensive.

However, as is often the case with new legislation, several issues emerged that were creating problems for individuals, health care providers, agents, and the courts.  As a result, in 2005 a legislative review of the Personal Directives Act was undertaken and Bill 40 proposes amendments to the Act that resulted from this consultation process.

Several of the amendments are quite substantial.  For example, there is the introduction of a process that would allow for a Personal Directive to be deactivated if it is determined that the individual has regained his or her capacity.  This is ideal in situations where a person may have become ill and needed to have their agent make some decisions for him, but then proceeded to make a full recovery. 

There is also going to be a new process whereby the Office of the Public Guardian will accept and investigate written complaints about the actions of the agent.  The complaint needs to be substantive, i.e. it has to show that the agent's actions are likely to bring harm to the maker, not just that you think it's better for your Mom to live in Edmonton than in Red Deer.   

Other provisions will allow the Office of the Public Guardian to act as an agent of last resort if an individual has no one else that they trust to make that decision for them, the recognition of non-Alberta directives, and the introduction of a voluntary registration system.  This registration system will allow makers or agents to go on-line and provide summary information about the Personal Directive (i.e. maker, agent, date).  While it sounds good in theory, at this point third parties (i.e. lawyers) will not be able to enter that information.  The reality is that a lot of our clients are elderly and not familiar or comfortable with using computers for that kind of task, not to mention the procrastination that clients of all ages practice when it comes to getting their estate documents together.  It would make much more sense if lawyers were allowed access to the system to input that information on behalf of consenting clients.

Bill 40 has currently passed first reading.