Most provinces call these documents the power of attorney or enduring power of attorney. The terminology can vary depending on where you live. These documents are vital parts of an estate plan.
What is a power of attorney?
A power of attorney is the legal document that allows one person to act on behalf of another person. Granting this privilege enables the attorney to sign legal documents and make contracts according to the powers given within the document. Such documents may provide the ability to manage financial affairs to someone immediately or depend on the severity of your incapacity. Unless you restrict your attorney’s powers, they will be able to do almost anything that you can do when it comes to your finances. Although, by law, your attorney cannot change your will, make a new will for you, or appoint a new power of attorney on your part.
Do I need to use a lawyer to prepare my power of attorney?
The law does not require anyone to use a lawyer for these services, but that doesn’t mean these documents should not be put together on your own, especially if you have a complicated situation.
Whether you use a lawyer or not, you must be mentally competent at the time a power of attorney document was signed. If you suspect someone might challenge your power of attorney by saying that you were not mentally capable when you signed it, a lawyer can help dispute their claim. You should also ask your doctor for a medical report confirming your mental capacity. You should not assume that your power of attorney ceases to be effective upon death, which is when your will comes into effect. The person you trust with your assets is called your attorney.
Who should you make your attorney?
The ideal attorney has the following characteristics:
- Will manage your assets to protect you and your estate
- Has experience managing money
- Can commit to years of maintaining your assets
- Has the time to pay your bills
- Is comfortable dealing with accountants and lawyers
- Has the patience and time to communicate with those who will take care of you
- Usually, the same person you name as your executor is an excellent choice as your attorney
What if there is no enduring power of attorney?
If you don’t have an enduring power of attorney if you lose your capacity to manage your affairs, then the public trustee takes over your matters until the courts appoint someone else. No one, not even your spouse or children have the legal authority to manage your finances in the absence of a power of attorney.
In that case, a committee is appointed by the court, which requires a court application setting out the circumstances of the case. Affidavits also have to be obtained from two doctors proving mental incapacity. Such a court application is expensive and time-consuming.
Having more than one person as an attorney
You can name more than one attorney. If you appoint more than one, you can require that they work together or you can have them act separately as well. If you include this phrase, either of your attorneys will still be able to act alone on your behalf. For example, if one is away or sick, the other would still be able to sign cheques and give instructions on your behalf. If you do not indicate that they can act separately, they will have to do everything together.
Federal Privacy Laws
If something happens to you, and you are no longer capable of making sound financial decisions, don’t assume that your spouse, parents or kids can make those decisions on your behalf. The Federal Privacy Act goes a long way to protect your information from getting in the hands of people you don’t want having access to it.
The best way to ensure that you get to pick the person you want to make financial decisions when you can’t is to have an enduring power of attorney. The team at Homestead Law can help you through the process so that your assets and money never end up in the wrong hands. Call us today to book a consultation.