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Estate Planning : Power of Attorneys

August 10th 2016

Legal documents can be very intimidating and confusing, especially when it comes to Wills and Powers of Attorney.  Each of these documents are equally important and each has its own specific use. Previously we discussed the importance of getting a will, so today I wanted to focus on Power of Attorney.  Let me start by defining the difference between the two, because it is common for people to confuse the use of these terms and documentation types and they are not interchangeable.

Will vs. Power of Attorney

A Will is a legal document that can only be enforced after one dies, whereas a Power of Attorney is a legal document that can only be enforced when one is still alive

The following link is a great resource for detailed information on Powers of Attorney, and I’ve cited much of my information from this great link:

http://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/livingwillqa.pdf 

There are 2 types of Powers of Attorney that deal with property:

Continuing Power of Attorney for Property (CPOA) – covers your financial affairs and allows the person you name as Attorney (representative) to act for you even if you become mentally incapable.

Non-Continuing Power of Attorney for Property – covers your financial affairs but cannot be used if you become mentally incapable.  This is usually used in situations where you need someone to look after your financial affairs while you’re away from home for an extended period of time.

The term “attorney” refers to the person(s) you have chosen to act on your behalf to make decisions regarding your property.  The attorney does not have to be a lawyer and you can appoint more than one attorney if you wish. 

When choosing your attorney for property, you want to ensure that he or she is a trustworthy individual as they will be able to do almost anything you can do concerning your finances and property.  For instance, they can sell property, sign documents, start or defend lawsuits and make investments. Unless you make restrictions regarding their powers, they will be able to do any of these things on your behalf.  Your attorney cannot however make a Will or a new Continuing Power of Attorney on your behalf.

Power of Attorney for Personal Care (POAPC) – covers your personal decisions, such as housing and health care (examples are medical treatment, housing, food, hygiene, clothing). 

The attorney(s) you choose for your personal care can be different than the attorneys you choose for property.  Your Power of Attorney for Personal Care can only be used when you are mentally incapable of making your own personal care decisions, as it relates to the particular personal care matter at issue.  For instance, you may be able to make decisions about day-to-day matters, but incapable of making more serious health care decisions.  There are situations where a health care professional must determine whether you are incapable of certain decisions before your attorney can act. 

Give careful consideration when choosing your attorney(s) for personal care, as they will be making extremely important decisions about your health and quality of life.  You can make restrictions regarding your attorney’s powers and you can also attach a “living will” (also referred to as “advance directive”) to your Power of Attorney for Personal Care.  The “living will” specifies your personal care wishes which your attorney will have to follow, rather than making their own decisions.

If you don’t have any Powers of Attorney and you become incapable of handling your financial affairs and/or your decisions regarding personal care, then your loved ones can make an application to the Ontario Public Guardian and Trustee for this appointment and the courts may appoint someone to act as your guardian for property and someone to act as your guardian for personal care.  They may appoint different people for each of these guardianships, depending on the circumstances.  Perhaps the person(s) appointed may not be someone you would have personally chosen, nor someone you would have trusted with your property or personal care. 

If you don’t have Powers of Attorney in place, then I strongly urge you to seek legal advice and get these documents drawn up so that you have peace of mind that your wishes will be honoured.

 

Side Notes: I am not a lawyer and therefore, none of my advice should be taken as “legal advice”.  This blog is meant to provide basic information about Powers of Attorney, and to motivate you to get more detailed advice and I encourage you to get these legal documents drawn up sooner rather than later.  I recommend you consult a lawyer to prepare your Powers of Attorney to ensure these documents cover all legal aspects of your financial and personal circumstances.  

Written by Betty Anne Flynn