Understanding Legal Capacity In Alberta

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Planning for Legal / Mental Capacity Issues in Alberta

Legal capacity, or just capacity as it relates to an individuals ability to make decisions, is a legal term. Often doctors often step in to determine if a person has the mental ability to make decisions for themselves. However, the term’s use is not a medical one. The term legal capacity involves more than a person’s metal state of mind. It also includes a person or corporation’s right or ability to do certain things (such as contract or sue). The following out lines the law as it relates to a person’s ability to make legal decisions for themselves. The lawyers at Kahane Law Office in Calgary, Alberta here families and individuals when they face any capacity issues.

What Is Legal Capacity?

At its very root, legal capacity is a person’s ability to understand the nature and consequence of entering into a legally binding arrangement that impacts their, or others’, rights, entitlements under the law, responsibilities or obligations. An individual who does not have legal capacity, may not have such decision making ability for a short term or indefinite period of time. During that time, they do not have the ability to make legal decisions for themselves. As Alberta lawyers, we are required to ensure that the person who enters into any legal arrangement does so with a full understanding of the consequences of doing so.

What Causes the Loss of Legal Capacity?

Losing capacity is not always a permanent situation. At times, losing one’s ability to decide for oneself may only be for a matter of hours. For examples, the following are ways of how loss of capacity occurs:

  • Dementia;
  • Being intoxicated on drugs (prescribed, legal or recreational) or alcohol;
  • Alzheimer;
  • Being unconscious, in a coma, in a vegetative state;
  • Sustaining brain damage; and lastly
  • Being in extreme pain;

What Are The Consequences of Not Having Legal Capacity?

Not having legal capacity, as it relates to an individual, means that a person cannot contract or enter into any legal arrangement, (verbally or by way of execution of an legal document) until such time as they regain the capacity to do so. The following are common situations where lawyers in Alberta face the consequences of an individual not having requisite capacity. If there is any doubt of legal capacity, as lawyers in Alberta we are required to ask for the person to have a capacity assessment completed with a medical doctor.

Capacity when buying, selling or mortgaging a home

This is one of the most common situations where lawyers deal with legal capacity issues. Often with the failing of one’s health, the decision is made to move or withdraw equity from one’s home to pay for treatment or care facilities. If a person does not have capacity they cannot enter into a mortgage contract or transfer their interest in real property.

Capacity for executing a will, health care directive or power of attorney

As an individuals health begins to fail, they or their loved one often want to make sure that their financial plans are looked after. This most often involves creating a will, enduring power of attorney and personal directive (or living will). Legal capacity is required in these situations.

Capacity for selling a business or any other financial or corporate transaction

If people begin to lose their ability to make decisions, they are often in a situation where any business they have must be sold or otherwise run by someone else. This includes running day to day operations, signing cheques, selling shares or assets of the corporation. Without legal capacity, another individual authorized to sign on behalf of a corporation, must do so.

What Is Required If A Person Lacks Legal Capacity in Alberta

There are two ways of dealing with an individual’s lack of legal ability to decide for oneself in Alberta. Which of the two that is required will depend on if a person was prepared for an eventual loss of capacity or not. To make decisions for a person who does not have legal capacity, you either need a Power of Attorney that is effective with the lack of cognitive ability or a trusteeship court order.

Power of Attorney

A power of attorney can be used to have someone sign on behalf of an individual who has lost capacity. In order to be used, the power of attorney must either be specifically drafted so that the power of attorney survives the person losing legal capacity or only become effective if a person loses capacity. Either must be in the proper form and specifically drafted to allow for the specific actions what the attorney is looking to perform. While legal capacity is lost, an individual cannot sign a power or attorney.

Trusteeship Order

A trusteeship order is an order of the court granting someone the legal right to make decisions and do thing son behalf of an individual who does not have legal capacity. These decisions are only those that relate to assets, things, and/or financial related matters. For making personal decisions about medical care or life style type choices, one would need a guardianship order.

Legal Capacity Lawyers in Calgary, Alberta

The legal capacity lawyers at Kahane Law Office in Calgary, Alberta are pleased to assist you. We understand that this is a very difficult and emotional issue to deal with if someone has lost capacity. Further, we also understand that it is difficult for someone who is losing capacity to accept. We work with you to deal with these issues in a sensitive and caring way. Whether it is setting up an estate plan in advance to avoid potential legal capacity issues or making an application to the court in case it is already lost. You can reach us toll-free at 1-877-225-8817, 403-225-8810 locally or email us directly here.