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Powers of attorney and represent agreements: How they differ

British Columbia residents have no doubt heard the terms power of attorney and representation agreement discussed in the context of estate planning. They may even know that they should consider drawing up a power of attorney and representation agreement as a part of their estate plans. However, they might not know how these two legal documents differ from one another.

An "enduring power of attorney" as it is formally referred to is a document that gives an "attorney" -- or specifically trusted individual -- the ability to make legal and financial decisions on another individual's behalf. The document will usually go into effect in the event of mental incapacity as a result of an illness or accident. The enduring power of attorney is important to have on file because, if an individual becomes incapacitated, he or she will definitely need someone to make these kinds of decisions. Without such a document, time-consuming and sometimes costly court documents must be filed in order for someone to assume control over the incapacitated person's affairs.

A "representation agreement" is equally important to have on file because a power of attorney alone will not give the "attorney" the ability to make decisions regarding health care on behalf of the incapacitated person. In order to give someone this power, it is necessary to create a representation agreement. Just as was the case with the enduring power of attorney, without a representation agreement, costly and time-consuming court procedures are necessary to assign someone with this power.

Clearly, both a representation agreements and a power of attorney should be included in every British Columbia estate plan. In fact, these documents are the most important documents for the individual him or herself to ensure that important decision can be made swiftly, when they need to be, and without unnecessary delays in the event of an individual's unexpected incapacitation.

Source: People's Law School, "Power of Attorney vs Rep Agreement," accessed July 21, 2016

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