Overview Of The Trustee Act

The Act regulates the conduct of trustees and applies to all persons entitled or acting under a will, deed, codicil, or other instrument. The Act also deals with the discharge and appointment of trustees.

The fiduciary powers of a trustee may be set out in an instrument creating or declaring a trust. Where a trustee’s fiduciary powers are not set out in the trust instrument, they are imposed by the Act. The provisions of the Act apply regardless of whether the trust instrument sets out fiduciary powers, except to the extent that the trust instrument excludes the Act’s application.

Sections 5 through 25 of the Act set out the powers of a trustee. Section 11 provides that a trustee has the power, subject to court approval, to mortgage the trust property for repairs and improvements. A trustee does not require court approval if the trust instrument authorizes mortgaging trust property for this purpose, or if the beneficiaries consent in writing. Section 15.1 allows a trustee to make any investment a prudent investor might make. Section 17.1 generally prohibits a corporate trustee from investing in its own securities, with the exception of a common trust fund managed by a trust company. Section 21 provides, in relation to trustee investments, that the powers conferred by the Act are in addition to the powers conferred by a trust instrument and that nothing in the Act authorizes a trustee to do anything the trustee is in express terms forbidden to do.

GENERAL EFFECT ON LAND TITLE PRACTICE

Trustees have powers and duties with respect to dealings with and investment of trust property. In some circumstances, the court may make vesting orders as to trust property. Sections of the Trustee Act should be read in conjunction with s. 180 of the Land Title Act on the recognition of trust estates.

CROSS REFERENCES AND OTHER SOURCES OF INFORMATION

The Public Guardian and Trustee Act provides for the appointment of a Public Guardian and Trustee and establishes the powers and duties of that office. Under s. 5 of the Act, the Public Guardian and Trustee has the authority to exercise powers or perform duties and functions conferred under other enactments, including, for example, the Infants Act, the Patients Property Act, and the Wills, Estates and Succession Act.

Under s. 6 of the Act, the Public Guardian and Trustee may:

1. act as an executor under a will or as an administrator of an estate;
2. be appointed as a trustee, either alone or jointly with another person; or
3. be granted a power of attorney or an enduring power of attorney, either generally or for a special purpose.

Under s. 6.1 of the Act:

1. The court may appoint a litigation representative to represent, in an action or other legal proceeding, the estate of a deceased party for whom no other legal personal representative exists.
2. The court must not appoint the Public Guardian and Trustee as the litigation representative of a deceased’s estate unless the deceased left no executor, beneficiary, heir, or other appropriate person who is willing and competent to act, and the Public Guardian and Trustee provides prior written consent to act as the litigation representative.
3. A person who requested the court to appoint the Public Guardian and Trustee as litigation representative must pay, in addition to any other fee imposed by this Act or the regulations, all expenses incurred by the Public Guardian and Trustee resulting from the appointment.

Under s. 6.2 of the Act, the Public Guardian and Trustee may, as a corporation sole, become and act as a director of a company in specified circumstances.

Section 7 of the Act sets out the powers that may be exercised if the Public Guardian and Trustee is appointed by a court order or under an enactment as a young person’s property guardian.

Under s. 7.1 of the Act, the Public Guardian and Trustee, while acting as trustee in specified circumstances for an adult who has not yet reached 27 years if age, may, during the term of the trusteeship, authorize payment of all or part of the trust money for the maintenance, education, or benefit of the adult.

Under s. 2 of the Infants Act, R.S.B.C. 1996, c. 223 the Public Guardian and Trustee may apply to court for an order to dispose of an infant’s land. Section 4 establishes that each disposition under the order has the same effect as if the infant had executed the disposition as a person of the age of 19 years at the time. Section 8 gives the Public Guardian and Trustee the power to lodge a caveat to prevent a sale that prejudices an infant.

Submissions

On the Declaration form, enter a description of the court order and attach an image of the court certified copy of the court order. The electronic Declaration is submitted in support of the instrument that creates or deals with the interest in land.

Definition of Patient

Section 1 of the Patients Property Act includes the following definitions:

• “committee” means the following persons:

• (a) a person appointed as committee under section 6(1);
• (b) the Public Guardian and Trustee under section 6(3);
• (c) a statutory property guardian under Part 2.1 of the Adult Guardianship Act;

• “patient” means

• (a) a person who, before paragraph (a.1) of this definition comes into force, was described in a certificate signed by the director of a Provincial mental health facility or psychiatric unit as defined in the Mental Health Act as one who is, because of mental infirmity arising from disease, age or otherwise, incapable of managing his or her affairs,
• (a.1) a person who has a statutory property guardian under Part 2.1 of the Adult Guardianship Act, or
• (b) a person who is declared under this Act by a judge to be
  • (i) incapable of managing his or her affairs,
  • (ii) incapable of managing himself or herself, or
  • (iii) incapable of managing himself or herself or his or her affairs.

1962-44-2; 1964-36-2; 1965-32-11; 1968-36-2; 1973-127-24; 1976-33-104; 1982-7-93, effective September 7, 1982; 1999-12-17, effective November 15, 1999 (B.C. Reg. 233/99); 2014-9-30, effective December 1, 2014 (B.C. Reg. 115/2014).

Powers of Committee

The powers of a committee appointed under the Patients Property Act are set out in s. 15 of the Act, which provides:

• 15 (1) Subject to section 16,

• (a) the committee of a patient as defined in paragraph (a) or (a.1) of the definition of “patient” in section 1 has all the rights, privileges and powers with regard to the estate of the patient as the patient would have if of full age and of sound and disposing mind,
• (b) the committee of a patient
  • (i) declared to be incapable of managing his or her affairs has all the rights, privileges and powers with regard to the estate of the patient as the patient would have if of full age and of sound and disposing mind,
  • (ii) declared to be incapable of managing himself or herself has the custody of the person of the patient, and
  • (iii) declared to be incapable of managing himself or herself or his or her affairs has all the rights, privileges and powers with regard to the estate of the patient as the patient would have if of full age and of sound and disposing mind, and as well the custody of the person of the patient.

• (2) For investing money, a committee is a trustee within the meaning of the Trustee Act.

1962-44-16; 1964-36-9; 1965-32-7; 2014-9-34, effective December 1, 2014 (B.C. Reg. 115/2014).

Subject to any restrictions in the appointing order, the committee has all the rights, privileges and powers with regard to the estate of the patient as the patient would have “if of full age and of sound and disposing mind”, including the power of disposition. The committee’s powers also extend to those that the patient may have had as a trustee, guardian, holder of a power of appointment, or personal representative. See also ss. 16 to 21 of the Act.

Note that most orders appointing committees include restrictions on dealing with the land of the patient.

Submissions

On the Declaration form, enter a description of the court order and attach an image of the court certified copy of the court order appointing a committee. The electronic Declaration is submitted in support of the instrument that creates or deals with the interest in land.

Power to Invest in Mortgages

The property of a patient does not vest in a committee appointed under the Act and thus is not registered in the committee’s name, in trust for the patient, or otherwise. However, under s. 15(2) of the Act, a committee appointed under the Act is a trustee within the meaning of the Trustee Act for the purposes of investing money. Accordingly, a committee may invest in mortgages under s. 15.1 of the Trustee Act.

Powers of Attorney

1. Patient by Court Order

   A patient, as defined in s. 1 of the Act, is not permitted to convey property. Under s. 19 of the Act, if a person is declared to be a patient by court order, every power of attorney given by the patient, including an enduring power of attorney, terminates once the order is made under s. 2 of the Act. See para. (b) in the definition of “patient” under s. 1 of the Act, s. 19 of the Act, and Parts 2 and 3 of the Power of Attorney Act.

2. Patient by Certificate of the Director

   Section 19.1 of the Act provides that, if a person becomes a patient by way of a certificate under para. (a) in the definition of “patient”, every power of attorney given by the patient is suspended pending a determination by the Public Guardian and Trustee about whether it is necessary or desirable for the Public Guardian and Trustee to manage the patient’s property. If the Public Guardian and Trustee determines that it is necessary or desirable to manage the patient’s property, the power of attorney is terminated. See para. (a) in the definition of “patient” in s. 1 of the Act, s. 19.1 of the Act, and Parts 2 and 3 of the Power of Attorney Act.

Representation Agreements

1. Patient by Court Order

   A patient, as defined in s. 1 of the Act, is not permitted to convey property. Under s. 19 of the Act, if a person is declared to be a patient by court order, every representation agreement made by the patient terminates, unless the court otherwise orders. See para. (b) in the definition of “patient” under s. 1 of the Act and s. 19 of the Act.

2. Patient by Certificate of the Director

   Section 19.1 of the Act provides that, if a person becomes a patient by way of a certificate under para. (a) in the definition of “patient”, every provision in a representation agreement that deals with the patient’s property is suspended pending a determination by the Public Guardian and Trustee about whether it is necessary or desirable for the Public Guardian and Trustee to manage the patient’s property. If the Public Guardian and Trustee considers that it is necessary or desirable to manage the patient’s property, the provisions of the representation agreement that apply to the patient’s property are terminated. See para. (a) in the definition of “patient” in s. 1 of the Act and s. 19.1 of the Act.

Caveats

A committee or the Public Guardian and Trustee, who certifies that the land of a patient is or may be endangered, may lodge a caveat under s. 282(2) of the Land Title Act. In accordance with s. 282(3), the two-month expiry period does not apply.

Adults may enter into representation agreements for the purpose of arranging, in advance, how, when, and by whom decisions about their health care, personal care, routine financial affairs, or other matters will be made if they become incapable of making decisions independently. The powers that an adult may confer upon a representative are set out in ss. 7 and 9 of the Representation Agreement Act. Under s. 7(1)(b)(iv) of the Act and s. 2 of the Representation Agreement Regulation, B.C. Reg. 199/2001, a representative, if authorized under the terms of an agreement, may make any investments that a trustee is authorized to make under the Trustee Act.

Section 44.3 of the Representation Agreement Act states that, if a representation agreement executed before September 1, 2011, authorized a representative to exercise the powers of an attorney, that part of the representation agreement is deemed to be an enduring power of attorney under Part 2 of the Power of Attorney Act on and after September 1, 2011.

Under s. 51(2.1)(b) of the Land Title Act, enduring powers of attorney in a representation agreement executed before September 1, 2011, are accepted by the land title office in the same manner as an enduring power of attorney signed under s. 16(2) of the Power of Attorney Act. A representation agreement executed after September 1, 2011, may not be used for land title purposes.

Effect of Patients Property Act

See the immediately preceding material on the Patients Property Act with respect to the effect of that Act on a representation agreement made by a person who becomes a patient.

Under the terms of the Trust and Settlement Variation Act, if property is held on trusts arising under a will, settlement, or other disposition, the Supreme Court may approve a proposed arrangement varying or revoking all or any of the trust or enlarging the powers of the trustees to manage or administer any of the property subject to the trusts. Under s. 4 of the Act, the court may also exercise its powers under the Act where land is subject to a legal life estate, with the holder of the life estate being deemed to hold the land in trust for the holder and the holders of successive interests in the land.

See also s. 186 of the Land Title Act regarding life estates.

The Estates of Missing Persons Act establishes a procedure by which a person may be appointed as curator of the property of a missing person and includes provisions outlining and circumscribing a curator’s powers to deal with the property. In accordance with s. 3 of the Act, acts done by the curator in respect of the property are binding on the missing person. The custody and management of the property is a trust, and the curator is a trustee within the meaning of certain sections of the Trustee Act. Under s. 4, a curator has no power to sell or mortgage any of the property of the missing person if the value of the portion of the property to be sold or the amount to be raised by mortgage exceeds $100, unless prior approval is obtained from the Supreme Court.

Section 10 of the Act provides that an office copy of the order appointing a curator or other order made under the Act is, when filed in any land title office, sufficient evidence to the registrar of the authority of the curator to deal with the property as mentioned in it.