Incapacity is the absence of the physical or mental faculties that are necessary to exercise civil and legal rights. A person who has been declared incapable by a court no longer has the legal capacity to administer his or her property. He or she can no longer rent, purchase or sell property, manage assets and investments, execute a last will and testament, make gifts or take any other estate planning action.
In addition, an incapable person is no longer able to care for his or her personal health. This entails incapacity to consent to medical care.
What To Do In The Event of Incapacity?
In Quebec, once a person becomes incapable, legal proceedings must be undertaken to legally declare the person incapable and appoint persons to look after his or her personal health, and to manage his or her assets. If the person concerned does not have a protection mandate (also known under its old name as a “mandate in anticipation of incapacity” or “incapacity mandate”), his or her family members or interested parties must file an application to the Quebec Superior Court to open a regime of protective supervision. Depending on the degree and the nature of the incapacity, the court may establish a curatorship (where the incapacity is permanent and total), a tutorship (where the incapacity is partial or temporary) or may appoint an advisor where the person concerned requires assistance or advice for certain acts for a certain period of time.
If curatorship or tutorship is established, a curator or tutor will be named and he or she shall administer the incapacitated person’s assets. In addition, the Court shall name a tutorship council of three persons which shall supervise the curator or tutor. The process of establishing a regime of protective supervision is scrutinized by the Public Curator, which may step in at any time for file applications or formulate objections.
The time and the cost associated with opening a regime of protective supervision and the Public Curator’s involvement in the process can be daunting. They can, however, be avoided by signing a protection mandate.
A protection mandate is a document whereby you appoint one or several persons to look after your personal health and to manage your assets should you become incapable. The designated individuals are referred to as “mandataries”. This document can only be signed whilst you are alive and capable. If you become incapable, the mandataries will need to file an application to the Quebec Superior Court to homologate the protection mandate.
Homologating a protection mandate is preferable to establishing a regime of protective supervision for two reasons. First, you choose in advance who will look after your personal care and manage your assets should be you become incapable. You do not have this guarantee if a regime of protective supervision is established.
Second, there is no requirement to appoint a tutorship council to supervise the mandataries’ actions. If you wish to impose certain administration requirements on your mandataries’ in relation to the management of your assets, you are free to do so in your protection mandate.
A protection mandate does, however, suffer from a major drawback. Between the moment you are factually incapable and the moment you are legally declared incapable and the protection mandate is homologated, your mandataries cannot manage your assets, which remain frozen. They will only be able to act once the protection mandate is homologated.
How To Fill The Gap of a Protection Mandate
A solution for filling the gap of a protection mandate is to sign a power of attorney and a protection mandate at the same of time. The power of attorney, which will take as soon as you sign it, gives one or several persons (referred to as “agents”) the authority to make financial decisions on your behalf. If you become incapacitated, the persons named in the power of attorney can manage your assets on the condition that an application has been filed to homologate your protection mandate.
We emphasize that a power of attorney alone is not sufficient for incapacity planning. Your agents cannot on the sole basis of a power of attorney manage your assets while you are incapacitated; you must have a protection mandate that is in the process of being homologated by the court.
Our firm assists clients with their incapacity needs, whether it be the preparation of protection mandates and powers of attorney, the homologation of protection mandates or establishing regimes of protection supervision.
The comments offered in this article are meant to be general in nature and are not intended to provide legal advice regarding any individual situation. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate for your circumstances.