When does a Power of Attorney (POA) take effect?

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A General POA is usually for a specified time frame and/or purpose and becomes invalid on the incapacity of the adult.

A Springing POA does not take effect until the occurrence of an event or date (typically, upon the adult becoming incapable). Section 26(2) of the British Columbia Power of Attorney Act provides that if the power of attorney is effective on a specified event, the power of attorney must provide “how and by whom the event is to be confirmed”.

As a note, a Springing POA may take longer to take effect than expected. For instance, it may take time to get the necessary declarations from a medical doctor and, as a result, the donor may go some time without any assistance in managing their affairs.

An Enduring POA is effective on the date it is when it is signed by the person and the attorney and endures even after the adult becomes incapable. An enduring POA can also be “springing” and triggered to become effective only if certain events occur. If the effectiveness of the enduring POA is to be deferred until a specified event, the enduring POA must provide “how and by whom the event is to be confirmed”.

Click here to read about the Different Types of Power of Attorney.

Click here to read about the Legal Responsibilities of a Power of Attorney.

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What are the different types of Powers of Attorney in British Columbia?

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In BC, the different types of Powers of Attorney (POA) include:

(1) A General POA;

(2) A Springing POA and

(3) An Enduring POA.

A General POA in British Columbia applies to all assets owned by the donor and ends upon the incompetency of the donor. Section 9 of the Power of Attorney Act, R.S.B.C. 1996, c. 370 (“POAA”), states that a general power of attorney confers authority on the attorney to do on behalf of the donor anything the donor can lawfully do by an attorney. The attorney does not have the power or authority to make decisions about an adult’s health care or personal affairs, such as consent to medical treatment, or where the adult should reside.

A Springing POA refers to a document in which the attorney’s authority can be exercised only if certain events occur. This power of attorney might specify that it comes into effect only upon one or two medical doctors providing a statutory declaration stating that the adult is “incapable of making decisions about the adult’s financial affairs”.

An Enduring POA contains a clause that specifically allows the power of attorney to continue to be effective if the adult should later become incapable of managing their affairs. Without such a specific direction, at common law, a power of attorney ceases to have any effect upon an adult becoming incapable.

Click here to read our article When Does a Power of Attorney Take Effect?

Not what you’re looking for? For more articles on Power of Attorney click here.

For information on Trusts & Estate Law, click here.

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How to make changes to a Will

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Are you contemplating making changes to an existing Will but aren’t sure how?

There are three ways to change a non-electronic Will. If you have an electronic Will, the only way to make changes is to execute a new Will. For a non-electronic Will, you may choose to make a new Will, you may execute what is called a codicil, or you may make one or several interlineations.

A codicil is an instrument that is meant to be read with a Will and must meet all the same requirements as a Will (including being in writing, signed at its end by the will-maker, and having 2 witnesses), but only refers to the specific provisions that are to be altered by the codicil. If there is a relatively minor change, a codicil may be easier than making a new Will.

Interlineations are physical alterations to the existing Will which are made by adding or striking out words in the Will. These physical changes must also be witnessed and signed off on, and they can make a Will difficult to read and understand. Interlineations are not a recommended method of altering a Will, as the changes may not be found to be valid, and it is usually better to execute a new Will or a codicil. If you wish to make any substantive changes, making a new Will is the best method to ensure your wishes are followed.

You might not even need to make an alteration to your Will. Have you considered a Memorandum? Read our article on Adding a Memorandum to a Will.

Did you mean to ask How to Revoke a Will? Click here to read our article on Revoking a Will.

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How to Revoke a Will?

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What do you do if you have made a Will, but you have changed your mind and you want to revoke it? You have a few options to revoke a valid Will. You may choose to make a new valid Will that contains a clause that revokes all previous Wills. You also may burn the Will or tear it up, or otherwise destroy it with the intention of revoking it, or instruct someone to destroy it with the intention of revoking it. There is also the option for you to make a writing that declares your intention to revoke all or part of your Will.

If you make a writing stating your intention to revoke all or part of your Will, in addition to being in writing, it must be both signed by you at its end and signed by 2 or more witnesses who must be present for your signature. In addition to the above, if you have an electronic Will, you may revoke it by deleting the electronic version of the Will with the intention of revoking it.

You should be cautious that you do not accidentally revoke a Will when you do not intend to. If an original Will was last in the possession of the will-maker and it cannot be found when the will-maker dies, the presumption is that the will-maker destroyed it with the intent to revoke. This can be avoided by ensuring that the original Will is kept in a safe place that is known to the executor, such as with a lawyer’s office.

 

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What is a Memorandum to a Will?

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A Memorandum to a Will can be a helpful tool if the Will-maker has items they wish to gift. It is essentially a list or schedule of items and how the Will-maker wishes to distribute them. This may be something to consider for collectors, or those with numerous sentimental items that will be distributed to various persons or organizations.

There are two types of Memorandum: one that forms part of the Will, and one that does not. If the Memorandum is to form part of the Will, there are certain requirements that must be met. These requirements include that

  • The memorandum must be incorporated into the Will by reference,
  • it must be in writing, and
  • it must be signed before the Will is executed.
  • The assets/items must be clearly identifiable.

A potential downside of a Memorandum that forms part of the Will is that it is difficult to change or to add to, and the same strict rules that apply to a Will will apply to the Memorandum. It is recommended that if an item holds significant financial or sentimental value it should be included as a specific bequest in the Will rather than in a Memorandum.

The other option is a Memorandum that is not intended to be legally binding on the executor, but rather a guide directing the personal representative on how assets are to be distributed. The advantage is this form of Memorandum can easily be changed by the Will-maker, and they may add and remove assets/items as they go. However, because this form is a guide for personal representatives, not a requirement, there is a chance that the assets/items may not end up with who the Will-maker intends them to.

Read our Trusts & Estate Law articles for more information. You can also read our How to Make Changes to a Will Article.

If you’re not sure whether a Memorandum or a Bequest would be better contact Heath Law in Nanaimo to help you with your Will.

 

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Considerations of a Will-Maker in appointing a Guardian for children

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Planning for what happens when you die can be very stressful. In addition to planning for how you would like your property, possessions, and assets distributed, if you have minor children, you will also want to consider appointing a successor Guardian. A Guardian of a child is responsible for making parenting decisions, including making important decisions such as where the child will go to school, healthcare decisions, and overall ensuring to act in the best interests of the child.

It is important to consider appointing a successor Guardian if you have minor children. Generally, the biological parents of a child are the Guardians. A Step-parent of the child is not a Guardian of that child unless they have been appointed by a Court Order. If one Guardian parent dies without appointing a Guardian in their Will, the other Guardian parent will become the sole Guardian of the child. If a sole Guardian of a child dies without appointing a successor Guardian, the Public Guardian and Trustee will become the child’s property guardian, and the Director under the Child, Family, and Community Service Act becomes the child’s personal guardian.

Anyone else who wants to be the child’s Guardian will need to apply to the Court for an Order, which can be a stressful and time-consuming process. If a child’s remaining living parent is not a Guardian of the child when the Guardian parent dies, the non-guardian parent does not automatically become a Guardian of the child. They would need to apply to the Court for an Order to appoint them as a Guardian.

When choosing who you want to appoint as a successor Guardian for your child in your Will, the only relevant consideration is the best interest of the child. The person you choose will become your child’s legal Guardian when you die. It is important to take the decision of who to appoint seriously, as they will take on all of your parenting responsibilities and will be responsible for your child’s well-being. There are many things you should consider when making this important choice.

You may wish to consider things such as

  • the person’s relationship with the child,
  • whether they would be able to afford to look after the child, and
  • if they would be able to meet the needs of the child.

Other factors may include

  • religion (the child’s and the proposed Guardian’s),
  • the child’s cultural heritage,
  • whether the child would need to leave their school or community,
  • whether the proposed Guardian has other children and
  • any other factors that you consider important.

When determining the best interests of a child, every case is different. Often family members are appointed successor guardians.

Choosing who to appoint as a successor guardian for your children can be an overwhelming process, especially if you have a complex family dynamic. For help in creating a Will and appointing a Guardian for your children, contact Heath Law

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Considerations of a Will-Maker in appointing an Executor

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Are you in the process of creating a will and have questions about appointing an Executor?

When deciding who you will choose to be the Executor of your Will, there are various factors you may wish to consider.

These factors include:

  • the potential Executor’s willingness to act,
  • whether you trust them,
  • whether they are familiar with you, and
  • whether they have the time and the ability to carry out the duties of an Executor.

A good approach is to ask your potential Executor if they would be willing to take on the task.

Because your Executor will be responsible for carrying out the instructions in your Will and dealing with your assets and debts, it is best to choose someone you trust. If they are familiar with your situation, it will likely be easier to deal with your Estate. Your Executor must be able to handle the work that comes with handling an Estate, which includes

  • locating property,
  • applying for probate,
  • distributing assets and gifts to beneficiaries, and
  • filing your Estate’s tax return to name a few.

Most people appoint a family member or a close friend, however, you may also appoint a lawyer, a notary public, or a private trust company. You can appoint more than one Executor, in which case they will have to act together. You will want to consider if the person or people you wish to appoint as Executor will put the interests of the Estate first and if they will have the capacity to take on the task.

You should also consider if the person you wish to appoint is likely to outlive you and ensure to name an alternate Executor in case the person you have chosen is unable or unwilling to act. If you have concerns about a potential Executor acting in their own self-interest, you may wish to hire an impartial third party to be your Executor or co-executor (such as a lawyer or notary public). You will also want to consider how your Executor will be compensated. If your Executor is also one of your beneficiaries who is getting a gift under the Will, they will not be able to claim additional compensation unless you authorize such compensation in your Will.

Still have questions about your Will? Click here to read more, check out our blog article about Appointing a Guardian for children, or contact us.

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Contrasting and Comparing Salary Arbitration in Professional Sport: Major League Baseball vs. National Hockey League

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Introduction

Salary arbitration ensures fair compensation for players and promotes negotiations between teams and players. Before the arbitration hearing, players and teams have the opportunity to negotiate and reach an agreement on a contract, which may help them avoid the arbitration process. In this blog, we’ll explore the distinct salary arbitration systems used in Major League Baseball (MLB) and the National Hockey League (NHL), shedding light on their differences and the benefits they offer to players and teams.

MLB’s Salary Arbitration

MLB employs the “final-offer” arbitration system to resolve salary disputes between players and their teams. A three-arbitrator panel, handpicked by the MLB Players Association and the MLB Labor Relations Department, is responsible for the arbitration process. The panel considers proposals put forth by both parties in a hearing. During the hearing, the panel weighs several criteria, including the player’s past contributions, career consistency, compensation history, comparative salaries, and the team’s recent performance and public acceptance. After hearing arguments from both sides, the panel chooses either the player’s or the club’s salary figure for the upcoming season.

The final-offer system stimulates negotiations by encouraging each side to present more realistic figures. The arbitrator’s likelihood of choosing the opposing side’s offer motivates compromise, making the more reasonable demand or offer more likely to prevail.

NHL’s Salary Arbitration

In the NHL, both players and teams may elect salary arbitration. The NHL’s salary arbitration system is referred to as conventional arbitration. In this process, negotiators present their offers and arguments to an arbitrator. The arbitrator then makes a final decision, which could either align with one of the offers presented or fall outside of those proposals.

The hearing is presided over by a neutral arbitrator chosen from a group of eight members, all affiliated with the National Academy of Arbitrators. Each side, represented by the NHL Players’ Association (NHLPA)/player and the NHL team, is allotted ninety minutes to present their case, including counter-arguments and comparisons of players from the opposing party. They present their offers by using statistical criteria to identify contracts similar to the player’s and justify where the player stands in relation to those contracts. The arbitrator’s ability to exercise flexibility in salary selection fosters fair and reasonable resolutions, ensuring a well-balanced approach to determining salaries.

 

Conclusion

In conclusion, salary arbitration is an essential mechanism in MLB and the NHL to settle contract disputes between players and teams. The primary distinction between the systems lies in how arbitrators handle the offers. In MLB, the arbitrators must choose one of the two presented offers, while in the NHL’s system, they have the flexibility to select a salary figure not proposed by either side. These arbitration processes actively encourage negotiations, making them vital tools for ensuring equitable compensation and maintaining the competitiveness of both leagues.

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Purchase of a Business – The Importance of Employee Considerations

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Introduction

During the sale of a business, it is essential for both the seller and the purchaser to carefully examine the potential employment issues that may arise. Evaluating these matters during the due diligence process is crucial because hidden employment liabilities, which are often not apparent on the balance sheet, can significantly impact the financial viability of the transaction.

Employment Matters in Share Purchase Transactions

In a share purchase transaction, the purchaser –  by acquiring the vendor’s shares of the company – steps into the vendor’s shoes when it comes to employment issues. This means that existing employment agreements between the employees and the employer remain unaffected, and their terms and conditions continue unchanged. Maintaining employment continuity is of utmost importance in these transactions, and employers can simply inform employees about the share transaction after the closing date.

Employment Matters in Asset Purchase Transactions

In an asset purchase, the purchaser is not automatically obliged to take on the vendor’s employees. Unlike in share transactions, at common law, the sale often results in a termination of employment with the vendor company. Vendors should be aware that the sale of assets does not provide the employer with cause for discharge, reasonable notice, or severance pay. Consequently, the vendor remains liable for such claims, subject to an employee’s duty to mitigate damages or the purchaser agreeing to rehire.

Employment Standards Act of British Columbia

Purchasers must be mindful of section 97 of the Employment Standards Act (“ESA”), which stipulates that if a buyer continues the employment of the employees without any interruption, the buyer will assume the role of the employer and be required to take on all obligations and liabilities. Additionally, section 97 of the ESA states that if the purchaser employs a former employee of the vendor, the benefits contingent on the employee’s length of service, such as vacation, notice of termination, pay in lieu of termination, and severance pay, carry over to the employee’s employment with the purchaser. Consequently, the ESA presumes the purchaser to be liable for the employee’s full length of service with both the vendor and purchaser.

Given the potential liabilities associated with employee terminations, purchasers and vendors often engage in extensive negotiations. To minimize liability, vendors typically prefer the purchaser to hire their entire workforce on the same terms and conditions, rather than selectively retaining specific employees. If the purchaser chooses not to retain all of the vendor’s employees, both parties will negotiate to allocate liability for termination costs.

 

Conclusion

In conclusion, employment matters are critical aspects of business sales that demand thorough consideration from both the seller and the purchaser. Addressing these issues during the due diligence process helps identify potential liabilities and minimizes risks for both parties involved in the transaction. By carefully evaluating employment-related aspects, a smoother and more successful business sale can be achieved.

If you are in the process of initiating a purchase or sale of a business, contact Heath Law by PHONE: 250-753-2202 or send us an email.

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Conditions Precedent – What is it?

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Conditions Precedent – What is it and what does it mean?

In real estate or commercial purchase contracts, “Conditions Precedent” are specific conditions or requirements that must be fulfilled or satisfied by either the buyer or the seller (and in some cases both) before the contract becomes legally binding and enforceable.

These conditions act as prerequisites or contingencies that protect the interests of both the buyer and the seller and ensure that certain key elements are in place before the transaction can proceed.

The fulfillment or waiver of the condition precedents, or subject clauses, is normally referred to as “subject removal.” A common example of a condition precedent is: “the Buyer’s obligation to complete the purchase of the Property is subject to the Buyer being satisfied with the results of a physical inspection of the Property on or before [month, day, year].”

Conditions Precedent may vary depending on the specifics of the contract, but common examples include:

Financing: This condition requires the buyer to secure financing or a mortgage for the purchase of the property before the contract is finalized. If the buyer fails to obtain the necessary financing within the specified timeframe, the contract may be terminated without any penalties.

Inspection/Site Investigation: This condition allows the buyer to conduct a property inspection of the land, building or equipment by a qualified professional to determine whether the condition or state of the asset being acquired is satisfactory. If significant issues are found during the inspection, the buyer may request repairs, negotiate the purchase price, or even withdraw from the contract if the seller refuses to address the concerns.

Title Investigation: This condition involves a title search to ensure the property’s title is clear of any liens, charges, encumbrances, or legal disputes. The sale can only proceed if the title is free and marketable or if contractual language is included to address the discharge of any financial charges or encumbrances.

Zoning/Bylaws: The contract may include conditions that require the seller to obtain any necessary zoning approvals, building approvals or permits or other local government approvals for the property.

Third-Party Consents or Approvals: In some cases, the contract may stipulate that the purchase is contingent on obtaining consents or approvals from third parties, such as government authorities or regulatory bodies. Another example is where a business is occupying leased space and the consent of the landlord is required to a change in tenant. A further example is where a franchise is being purchased and the consent of the franchise system to a transfer of the franchise is required.

Have Questions about real-life uses of Conditions Precedent? 

Purchase of a Business – What Are Usual Or Typical Conditions Precedent That a Purchaser Would Want in an Asset Purchase Agreement

What Are Usual or Typical Conditions Precedent That a Purchaser Would Want in a Share Purchase Agreement

Key Differences Between an Asset Purchase and a Share Purchase in Business Acquisitions

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