If you are unable to make decisions with your estates or finances, you can appoint someone who can. In Canada, power of attorney is a legal document that gives another person the right to act on your behalf for financial and legal matters. This document should always be written with the help of a family law firm for this to hold up in court if anyone attempts to access this individual’s estate or finances.
Power of attorney applies to many circumstances, for example, having an appointed person be able to write cheques, make bank payments, or buy and sell real estate in your name. However, in British Columbia, power of attorney differs from having a representation agreement drawn up.
Why do people have a power of attorney?
There are a variety of reasons why people choose to appoint a power of attorney in Canada. For example, if you’re approaching old age you may want to appoint someone to manage your estate for you, or if you work abroad a lot, someone to manage your finances and banking while you’re away. There is also the case that you may have an illness that inhibits you from making decisions about your finances in the future such as Alzheimer’s or dementia. It’s always important to plan to ensure your finances and assets are in the hands of someone you trust completely.
The amount of control you give a power of attorney depends on your needs; some people give the power of attorney complete power over their finances, others limit control to a specific task, for example, collecting a pension or cashing a specific monthly cheque.
There isn’t a limit on the number of powers of attorney’s people have. Some people choose to have a second power of attorney for certain aspects of their finances.
What types of power of attorney are there?
Power of attorney in Canada is different across all Provinces. In British Columbia specifically, power of attorney can be straightforward, as described above, or you can request “enduring power of attorney”.
Typically, there are two main types of power of attorney: ordinary and enduring. An ordinary power of attorney operates as long as the person they are representing is still alive. However, if the person they are representing passes away or is in a mental state where they are not about to fully function, this power of attorney is no longer valid.
What is an enduring power of attorney?
Enduring power of attorney is when you, the adult, allow your attorney to act on your behalf should you become mentally incapable. For example, you suffer a traumatic brain injury and are unable to make decisions for yourself or you reach an age where simple life choices become challenging.
To ensure that enduring power of attorney is valid, your document must specifically state whether your attorney can control matters only while you are capable, incapable, or both.
It’s worth noting that a power of attorney in British Columbia does not have the power or control over your health. For this matter, you will need a Representation Agreement to be drawn up by a law firm.
How do I choose my power of attorney?
The person choosing a power of attorney is called a donor. The donor must always be an adult and must always be capable of making decisions at the time of instructing and executing the power of attorney.
First and foremost, your power of attorney needs to be a person you explicitly trust. After all, they’ll be making significant decisions regarding your finances and potentially your health should you fall incapable of providing self-personal care.
A power of attorney doesn’t mean it has to be a lawyer. Many people choose a significant other. Others choose a close friend or relative to act on their behalf. Remember that selecting a person to be your power of attorney is entirely voluntary and you do not need to sign any papers if you do not wish to.
As previously mentioned your power of attorney must be an adult who is capable of making decisions. They can’t be bankrupt or the owner, operator, or employee of a nursing home in which the donor is a resident.
Some people choose to appoint an alternative or substitute Attorney. This is a ‘second in command’ person who can act if the first choice becomes incapable, unable, or unwilling to act for the donor.
What responsibilities will my attorney have?
After choosing your Attorney, it’s important to clearly understand the responsibilities that person has. These include:
- acting in your best interests
- accurate recording keeping of transactions and dealings on your behalf
- act with good faith
- keep your money and property separate from their own
This is why it’s important to choose an Attorney who you trust completely.
What happens when someone dies?
When a person passes away the power of attorney becomes invalid. If the donor has made a will, the executor will then take control of the personal property and finances, and distributes this in accordance with instructions outlined in the will
If a person doesn’t have a will, the person’s property and finances are distributed according to law. The distribution may be against the deceased person’s wishes, therefore it’s recommended that a last will and testament is always drawn up. It’s worth noting that different provinces across Canada have different rules regarding power of attorney. It’s always worth talking to a family lawyer to find out more about the legislation regarding your particular province before executing power of attorney.
Need help with power of attorney in Canada? Dreyer Davison Family Law firm has over 45 years of experience. Let us know how we can help you, today.