When you cannot take care of your financial matters (due to travel, illness, incapacitation, or death), who will act on your behalf to ensure your financial obligations and wishes are met? You can appoint a Power of Attorney to handle your affairs in your stead.
In the article, we will talk about the types and responsibilities of this role, share examples of when you might need a power of attorney, and provide some tips for choosing the right person.
What is a Power of Attorney?
A Power of Attorney (POA) is an adult you appoint to handle your financial and other legal obligations when you are unable to. This should be a responsible adult, likely a family member or close friend, but you can also assign responsibility to a trust company if you don’t know anyone eligible or willing.
In this case, “Attorney” does not refer to a legal professional but to the person receiving the power. The “Donor” is the person giving the powers. The Donor appoints a Power of Attorney to act in their absence.
Your assigned Attorney can handle responsibilities including buying/selling property, paying bills, and handling other financial matters. Unless you stipulate limits on their power, they can manage any property and financial matters that you would have.
They can not make any decisions regarding your medical, health, or personal care. To assign someone to handle your health and wellbeing, you’ll need a Representation Agreement instead.
Benefits Of Creating A POA
Assigning an attorney now, when you are healthy, can help prevent any financial abuse or legal complications in the future. The benefits of getting a notary to help create your POA documents include:
Types of Power of Attorney
There are two types of Power of Attorney:
General Power of Attorney
You can appoint a General Power of Attorney to handle all or some of your financial and real estate matters. Their power ends when you can take on these responsibilities again.
These powers can be all-encompassing (i.e., handling all your financial and real estate matters while you’re in the hospital for a month) or specific/limited, which gives specific authority for a particular task or duration. For example:
Specific/Limited POAs end when the task is completed, or the date in the agreement has passed.
Enduring/continuing POAs
Enduring or Continuing Power of Attorney allows your assigned attorney to act on your behalf in all outlined matters, even if you become incapacitated. It must be created while the donor is still of sound mind. It can take effect immediately or upon your incapacitation.
How To Choose The Right Person
You are responsible for choosing a Power of Attorney while you are of sound mind. It should be someone you trust to carry out your wishes. We always suggest asking your chosen person first to ensure they are willing and able to help should the need arise.
You can choose your representative from one of these three groups:
This person can not be someone you are paying for any healthcare or personal care services. This means that your nurse can not be your POA.
Your chosen representative must be the age of majority in your province. If you appoint a minor, they can not act in this role until they have reached 19 years of age.
Are POA’s Paid?
Anyone acting as your Power of Attorney has the right to be compensated for any expenses they incur to manage your affairs. In addition to expenses, you can choose to offer your POA additional compensation if you choose. This must be specifically outlined in your enduring Power of Attorney document.
If you hire a Public Guardian or Trust Company, you may be charged fees for their services.
How To Appoint Your POA
Talk to a notary or lawyer to get Power of Attorney documents drawn up for you. There are templates available online but always get a notary or lawyer to help you with your documents to ensure all contingencies and specific circumstances are properly considered. This is especially important if you give your Attorney control over real estate transactions as those are more complicated.
How To Revoke A Power Of Attorney
You can revoke any POA agreement at any time as long as you have the mental
capacity to do so. Inform your POA in writing that their powers have been
revoked effective immediately. Be sure also to advise any financial institutions
or businesses they were dealing with. Ask all parties to destroy all copies
of your personal information.
If you wish to appoint someone new as your Power of
you must revoke any existing ones before selecting a new one.
A new agreement does not cancel any older ones still in effect.
Need A Power Of Attorney Document Now?
If you need a legally binding Power of Attorney document for you or a loved one, contact us today, and we can help you with this and any other estate planning help you need.