Legal Issues Surrounding Dementia

Presented by Jessica Lyle, LL.B., TEP

Alzheimer Society Nova Scotia

Provincial Conference – Championing Change in Dementia Care

October 22, 2018

Goal: ensure your wishes are followed

• How to accomplish that?

• Answer: estate planning!

• Anatomy of an estate plan:• Enduring Power of Attorney

• Personal Directive

• Will

• Trust (for example: Alter Ego Trust or Joint Partner Trust) –sometimes…

Competent or Capable?

• Competency: legal term used to describe a person’s ability to

understand what is going on around them and actreasonably

• Capacity: the ability to effectively manage a specific task, activity,

or area of responsibility there is no single, uniform test for capacity capacity can be task, location, and time specific

How to get your estate plan started…

• Discussion with profession advisors and family/ beneficiaries

• Plan for:1. incapacity (mental and/or physical)

2. death

GOAL – have something in place before you need it so your wishes and directions are being followed

Planning for Incapacity – Step One

Powers of Attorney Act

• Nova Scotia lesiglation:

3 A power of attorney, signed by the donor and witnessed by a person who is not the attorney or the spouse of the attorney, that contains a provision expressly stating that it may be exercised during any legal incapacity of the donor, is

(a) an enduring power of attorney;(b) not terminated or invalidated by reason only of legal incapacity that would, but for this Act, terminate or invalidate the power of attorney; and(c) valid and effectual,subject to any conditions and restrictions contained therein that are not inconsistent with this Act. [Emphasis added]

Power of Attorney (“POA”)

• Who is an “attorney”?

• often a family member

• reminder: Canadian lawyers are referred to as barristers and solicitors, not attorneys

• Who/what is a “donor”?

• You! (assuming you’re deemed competent)

• a donor is the person who gives the attorney the power to act and determines the scope of that power

Authority of POAs/EPOAs

• POA authorizes attorney to act on your behalf

• Scope of power?

A general power – typically enduring (“EPOA”)

your attorney can do almost anything you can

A specific or limited power

restricts the attorney to certain tasks or a limited time

Practical Tips for POAs/EPOAs

• Substitute attorney(s) can (and should!) be named

beware appointing more than one at a time

family dynamics frequently deteriorate when a loved one is unwell

tangible implications: banking!

Accountability and consultation language instead

• Effective when required

“springing” POAs can be problematic… can be used while donor competent, at donor‘s discretion

Planning for Incapacity – Step Two

Personal Directives Act

• Nova Scotia legislation:

3(1) A person with capacity may make a personal directive:

(a) setting out instructions or an expression of the maker’s values, beliefs, and wishes about future personal-care decisions to be made on his or her behalf;

(b) authorizing one or more persons, who, except in the case of a minor spouse, is or are of the age of majority to act as delegate to make, on the maker’s behalf, decisions concerning the maker’s personal care…

Definitions – Capacity & Personal Care

• Nova Scotia legislation:

2(a) "capacity" means the ability to understand information that is relevant to the making of a personal-care decision and the ability to appreciate the reasonably foreseeable consequences of a decision or lack of a decision;…

2(l) "personal care" includes, but is not limited to, health care, nutrition, hydration, shelter, residence, clothing, hygiene, safety, comfort, recreation, social activities, support services and any other personal matter that is prescribed by the regulations; …

Personal Directive (“PD”)

• Authorizes your delegate to make health andpersonal care decisions on your behalf when you can’t

can include specific treatments, general philosophy, living arrangements, social activities, end of life decisions (such as life support vs. allow natural death/no heroic measures)

not effective until you are incapacitated

medical assistance in dying legislation (“MAiD”) – requires competency and specific to the individual

Practical Tips for PDs

• Must be made while competent

• May name only one delegate at a time or per responsibility (but beware overlap!!!)

• May direct the delegate to consult with certain persons in making decisions

• Identify persons to be notified (or not) upon PD coming into effect

• Identify any relatives who are not to act

What Happens If You Do Nothing?

• If no POA, then a Guardianship Application is necessaryCostly

• Emotional• Bonding• Legal fees

Time consuming

• If no PD, then the legislation sets out a list of statutory substitute decision-makers (”SSDMs”) Not your choice

Planning for Incapacity – Step Three

• Wills are about caring for others

• Objective = ensuring your assets are disposed of in the manner that you intend

• Must be in writing

• Best practice: signed before 2 witnesses at the same time, who aren’t beneficiaries

Choosing Your Executor

• Your executor/trustee is the most important decision you will make when preparing your will

• Who should you choose?• Someone trustworthy

• Someone responsible with money, business matters

• Someone with time to devote to your estate

• Someone who will be able to act while grieving

• Someone calm in the face of family disputes

• Appoint at least one back up!

Wills - Structure

• Basic: Appoint executor and trustee

Payment of debts

Personal effects and specific gifts (if any)

Primary beneficiary (typically a spouse)

Secondary beneficiary (if minor children, must be in trust)

Powers clauses

• More complex: grandchildren; joint accounts; land (cottages; homes; wood lots); registered asset and insurance clauses; charitable intentions; trust clauses

What About Testamentary Trusts?

• Assets pass through the estate, but are then transferred to or held by the trustee of the testamentary trust

• Why?

To manage assets for minor children

To manage assets for a spendthrift, disabled person, addict, etc.

To preserve assets for children if spouse remarries and/or has children from a previous or subsequent relationship

To protect assets from marriage breakdown

To protect assets from creditors

To manage proceeds of life insurance, RRSPs or RRIFs, or TFSAs (need tax advice for this)

Cautionary Notes With Wills

• Update and review every 3-5 years so long as testator has testamentary capacity

• Need original document

• Wills made outside of Nova Scotia may be valid, but best to check with a lawyer

• Testator’s Family Maintenance Act: must provide appropriately for spouse and child(ren)

• Challenges to execution include capacity and undue influence

What Happens If You Do Nothing?

• You do not control how your assets are distributed

• “Spouses” are not common-law partners (unless registered as domestic partners)

• Administrator, not executor

• No guardian appointment (if minors involved)

• No opportunity for tax or estate planning

• No use of testamentary trusts

• Requires bonding/security (1.5x estate value)

Intestate Succession Act

Spouse only all to spouse

Spouse & relatives, no children all to spouse

Child(ren) only all to child/children

Spouse & one child first $50,000* to spouse, balance equally

between spouse and child

Spouse & children first $50,000* spouse, balance divided 1/3

spouse – 2/3 children

No spouse or children All to closest next-of-kin

(* can elect family home in lieu of or as part of $50,000 if held solely prior to death)

Other Estate Planning Tools

Inter vivos trusts

specifically: Joint Partner and Alter Ego trusts

tax neutral if age 65 or older

privacy

avoidance of claims by possible beneficiaries

avoidance of probate fees

note: annual costs (i.e., accounting)

Questions?

Contact information

Jessica Lyle, LL.B., TEPSealy Cornish Coulthard

Suite 200, 56 Portland Street Dartmouth, NS B2Y 1H2

Phone: (902) 466-2500

Fax: (902) 463-0500

Email: jlyle@scclaw.ca

Website: www.scclaw.ca

Assistant: Alice Arbuckle