Alberta moves to a uniform approach on substitute decision-making legislation

The Alberta Law Reform Institute (the “Institute”) is consulting with the public to determine if it will lead as the first Canadian province to adopt rules that would allow for cross-country recognition of substitute decision-making documents such as powers of attorney and personal directives.

The Institute hopes to address the inconsistencies that often exists between provinces around applying these types of documents. These inconsistencies stem from provincial legislation that differs from one province to another. What might be recognized as a valid substitute decision-making document in Alberta, isn’t valid in Nova Scotia, for example.

Formal validity vs. informal validity

The Institute’s report recommends tailoring the distinctions between formal validity (requirements that make the document valid) and essential validity (where the document defines the existence and extent of powers granted by the document), because formal validity and essential validity often differ from province to province.

What does this mean for you as an advisor?

The Institute has only made recommendations so far, so we will have wait to see what happens. But here are some possible outcomes, if the recommendations do become law:

If you have a client with assets in multiple provincial jurisdictions, the courts might now recognize an appointed attorney under a substitute decision-making document from another province as validly appointed.

For life insurance transactions it might become easier to deal with the attorney and the policy.

Some types of transactions will not be any easier to perform. For example, attorneys will still be unable to change a beneficiary designation on a life insurance policy without a court order.

We may find that other provinces follow suit and amend for uniformity of the province’s substitute

decision-making requirements.

What you can do now

It’s always good practice to ensure that you have protocols in place for when a client becomes incapacitated and their attorney is making their financial decisions. You can start now by having a candid and upfront discussion with your clients about their choice of Power of Attorney for finances and how your office will handle that direction.

March 2018