You’ve worked hard to build up your farm. You’ve made all decisions for the farm. It’s your livelihood and it supports you and your family.
Unfortunately, you’ve been in an accident that has left you without the capacity to make decisions. You’re still alive, but you aren’t able to farm anymore.
What now? Who steps in to deal with the farm on your behalf?
If you operate your farm through a corporation or a partnership, you may have already established chains of command that set out who can make decisions for the farm in certain circumstances. If that is the case, then those documents would likely govern.
However, for any decisions that you, personally, would need to make regarding the farm, if you have completed an enduring power of attorney document, the person who you have appointed in this document will likely be able to step into your shoes to make such farming decisions on your behalf.
An enduring power of attorney is an estate planning document. It is effective during the lifetime of the “grantor” (the person who signs the document, in this case, you). It is not effective once you die. That’s when your last will and testament comes into play.
Under an enduring power of attorney, you can appoint someone to make decisions on your behalf regarding your personal or property matters. That person is called the attorney. Note “attorney” in this context is not referring to your lawyer.
An enduring power of attorney provides your attorney with the ability to access your property (to the extent of the power granted under it) and make decisions related to it, including moving assets around, changing the method of farming that is used, or even selling property.
Because of this, it’s important to choose your attorney wisely. It is critical that the attorney is someone you absolutely trust. He or she should have the knowledge that would allow him or her to adequately step into your shoes or, at the least, have the wherewithal to be able to seek out and follow professional advice when needed.
If you do not have an enduring power of attorney in place, there is no default person who can step into your shoes and make decisions about your solely owned property on your behalf. Not even your spouse can do this.
If you are incapacitated but have not completed an enduring power of attorney, someone will need to make an application to the court for a guardianship order.
A guardianship order is a court order under which someone is appointed by the court to make decisions on your behalf.
The application process to get such an order involves securing two opinions from medical professionals indicating that you are incapacitated, gathering up a full list of your assets and debts and providing detailed information about your circumstances and why the person making the application is the best candidate for this role. As well, the applicant must meet bonding requirements (a bond is an arrangement where someone other than the applicant provides a guarantee that the applicant will fulfil his or her obligations as guardian). It also involves making your nearest relatives and the Public Guardian and Trustee (an office of the provincial government) aware of the application.
Making a guardianship application takes time. If someone opposes the application, the process can become even more prolonged. In the time that someone is taking to put together what is required for the application, there is no one who is able to make decisions for you unless the Public Guardian & Trustee steps in. That would mean a government body potentially making decisions for your farm.
Coming back to the scenario set out at the beginning of this article, if you have an enduring power of attorney in place and something happens to you, the person you have chosen to act as your attorney can step in so that the farm can continue to be operational.
Without a person to take on this role, the farm could be left in a vulnerable position while an application for guardianship is being made.
Bottom line: having an enduring power of attorney in place is the way to go. You get to choose who handles things when you can’t do it anymore. It’s much quicker and cheaper than the alternative.
Of course, this article looks at things from a narrow perspective.
There are more uses for an enduring power of attorney than just running the farm. There are also limitations on who can act as an attorney and parameters surrounding the attorney’s ability to take certain actions, such as providing gifts out of your property. There may be other circumstances specific to you that would come into play too.
If you want to make sure that someone you have chosen can step in to take care of the farm (or other matters) if you become unable to do so, you will want to have an enduring power of attorney in place. You will want a lawyer to help you complete this document to make sure it is properly prepared and signed. It’s the best way to protect you and your farm if something should happen to you during your lifetime.
Karen Crellin is a lawyer with Stevenson Hood Thornton Beaubier LLP in Saskatoon. Contact: firstname.lastname@example.org. This article is provided for general informational purposes only and does not constitute legal or other professional advice and does not replace independent legal or tax advice.