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The Right of Control

In a previous issue of Helicopters magazine, I wrote about the importance of having a valid and up-to-date will. Although this is a critical part of estate planning, there are other areas that command attention – specifically, power of attorney and representation agreements.


July 18, 2011
By Neil J. MacDonald

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In a previous issue of Helicopters magazine, I wrote about the importance of having a valid and up-to-date will. Although this is a critical part of estate planning, there are other areas that command attention – specifically, power of attorney and representation agreements.

These are both B.C.-based instruments, but other provinces likely have similar schemes in place. Both allow you to appoint another person, or a corporate entity, to handle some of your personal affairs, providing that certain sets of preconditions present themselves. These preconditions are either created by you, or will operate as a matter of law.

The power of attorney allows you to choose someone (perhaps a spouse or other family member, but it could be anyone else) to make decisions about your finances on your behalf. It allows them, and the appointed attorney, to do whatever you are able to do for yourself – such as buy or sell property – without you being present.

More than one attorney can be appointed either to act separately, or to act in conjunction with one another, on your behalf. A corporation may also appoint an attorney for a specified matter or purpose, to execute deeds or documents on its behalf. Any instrument executed by an attorney on behalf of the corporation (providing it falls under the scope of the attorney’s authority) is binding on the corporation. You can make a power of attorney subject to conditions or restrictions you specify in the document itself.

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A power of attorney will be effective and binding until it is terminated by revocation, or by operation of law, or by both. The power of attorney can be terminated by operation of law should you develop a mental infirmity. You can overcome this by writing the following: “In accordance with the Power of Attorney Act, I declare that this power of attorney may be exercised during any subsequent mental infirmity on my part.” This is called an enduring power of attorney. Any lawyer can create these documents for you quite easily.

Another legal instrument to consider is the Representation Agreement. This provides a mechanism to allow you to prearrange how, and by whom, decisions can be made on your behalf should you become incapable of making them yourself. It obviates the need for the court to appoint someone instead. Some reasons for creating this could include an incapacitating injury or illness.

The standard clause on the instrument deals with decisions on health care, personal care or financial issues. The types of decisions that can be made include major and minor health-care issues, personal-care issues such as where you live, and financial issues, such as paying bills or making investments.

You may also need to appoint a “monitor” to oversee your representative for financial issues, unless your representative is your spouse (or public guardian or trustee, or credit union or trust company), or unless you have designated two or more to act unanimously.

The standard provisions do not allow your representative to make life-support decisions for you, unless you specify that they could. You may also specify that the representative be permitted to physically restrain you, make health-care decisions for you – even if you are refusing at the time – and make decisions regarding your minor children.

Both your representative and your monitor must act in good faith. This means they must act as a reasonably prudent person would, in a diligent manner, and in your best interests. The monitor must make reasonable efforts to make sure the representative is complying with their obligations toward you. Once satisfied, they have complied with their obligations toward you and would not be found liable if anything went wrong.

There are several ways for the “representative agreement” to come to an end. Your death will end it, so will a divorce – if your spouse is your representative (unless you indicate it should continue). The incapacitation or death of your representative would also, of course, end the agreement.

These instruments give considerable power to others to act on your behalf when you are alive. Great care should be taken when considering whom you give this power to, for what purpose, and for how long. Think of these as a couple more tools in your estate planning tool kit!


Neil MacDonald is an aviation consultant and lawyer, working in the Middle East. He is ISMS and ISO 9001:2008 QMS Lead Auditor trained, holds an ATPL-H, and flies as an IFR Off-Shore Captain. neil.j.macdonald.consulting@gmail.com. This is not a legal opinion. Readers should not act on the basis of this article without first consulting a lawyer for analysis and advice on a specific matter.


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