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How is legal (in)capacity determined in Alberta?

Legal capacity addresses a person’s ability to understand the nature and consequences of making decisions that:

A) are legally binding

B) affect their rights, responsibilities, obligations, and legal entitlements, as well as those of others

Examples of these decisions include entering, buying or selling a home or business; initiating a lawsuit; and executing a Health Care Directive, Power of Attorney, or will. Someone who lacks legal capacity (in other words, is legally incapacitated) is deemed incapable of making such decisions, as they cannot understand the full consequences of doing so.

Causes of Incapacity

There are a variety of situations and illnesses that can result in temporary or permanent incapacity. They include but are not limited to:

  • Being rendered unconscious by illness or injury
  • Intoxication due to alcohol or drugs
  • Alzheimer’s or dementia
  • Traumatic brain injury that results in permanent damage
  • Coma or vegetative state

In Alberta, if a lawyer has any reason to doubt a person’s legal capacity to enter into an agreement or carry out a transaction, they are required to ask for the person to undergo a capacity assessment by a medical professional.

Capacity Assessments: What They Are and Who May Conduct Them?

A capacity assessment is a means of determining whether you can understand all of the elements necessary for sound decision-making—like understanding the consequences of one’s decisions. For example, if you are terminally ill and decide not to undergo a medical procedure intended to prolong your life, you would be deemed capable of making this decision only if you fully understand what will happen if you refuse the treatment.

Who may carry out a capacity assessment in Alberta depends on the circumstances under which the determination needs to be made, and whether or not you were prepared for an eventual loss of capacity.

Personal Care Directive

For a Personal Care Directive, the assessment must be done by two people, one of which has to be a psychologist or physician. The other may be a person named in your Directive or, if you did not list anyone before you lost capacity, a health care service provider such as a nurse, social worker, or care facility manager. If they conclude that you aren’t able to make your own decisions, they sign a form titled Declaration of Incapacity to Make Decisions about a Personal Matter.

Enduring Power of Attorney

Enduring Power of Attorney is an estate planning tool that gives a designated agent the legal power to make certain decisions on your behalf should you lose capacity. It is also known as Springing Power of Attorney because it takes effect when a certain event (like infirmity or incapacity) occurs and it enables your agent to do things like pay your bills, sell your house, and manage your money for you.

Like Personal Care Directives, an Enduring Power of Attorney can name a friend or family member to assess capacity, but it is a good idea to include a medical professional in this decision.

Trusteeship Order

A Trusteeship Order is a court order that gives someone the legal authority to manage the money, property, and assets of a person who does not have legal capacity. If you do not have an Enduring Power of Attorney set up, your loved ones may have to apply for such an order. Capacity assessments for purposes of getting a Trusteeship Order must be done by medical professionals, such as family doctors, psychologists, and psychiatrists.

Guardianship Orders

Guardianship Orders are similar to Trusteeship Orders in that the court may issue them if you become incapacitated and have not set up a Personal Care Directive. This document enables an appointed guardian to make non-financial decisions such as where you live and what medical care you receive. Like Trusteeship Orders, capacity assessments must be carried out by medical professionals.

Sometimes people recover from their illnesses or injury and regain capacity, while other times the incapacity is long-term or permanent. To ensure that your wishes are carried out if you become vulnerable in this manner, contact Estate Connection today. We can help you set up an estate plan that addresses capacity issues, giving you and your loved ones peace of mind.


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