A Power of Attorney is a written document that will allow another person to deal with your property when you are still alive, but at a time when you are unable to do so yourself. This document is different from a will since does not depend on a person’s death to come into effect.
A Power of Attorney comes into effect upon the written declaration of two medical practitioners, indicating that you are not able to make financial decisions for yourself.
If a person does not have a Power of Attorney and it becomes necessary for someone else to step in and make financial decisions for him/her, a Court application must be made trustee pursuant to the Dependant Adults Act to be appointed as a Trustee. The Dependant Adults Act requires that specific forms be completed, filed and served upon particular parties. The matter will then be heard by a Judge who will determine if a Trustee is needed and whether the applicant is suitable for that position. Often, such an application involved considerable time and expense during a period when the family can least afford either.
In contrast, if a Power of Attorney exists, it can come into effect immediately upon the written confirmation of 2 medical practitioners confirming that the person no longer has the ability to make financial decisions for himself. The person named in the Power of Attorney will then have the immediate ability to pay bills, make investment decisions, etc., without any necessity of Court application.
- Decide whom you would like to appoint as your attorney. This person does not have to be a lawyer, but simply needs to agree to take on the responsibility of administering your financial affairs if you become incapacitated and cannot do so yourself. It is important to ask the person whether he/she is agreeable to being your attorney before naming him/her in your Power of Attorney. Usually, the first choice is your spouse.
- Decide on an alternate attorney in case your first choice is unable or unwilling to act when the time comes.
- Ensure that the attorneys you choose live in the same province as yourself and are fairly familiar with the property you own. This is more for practical convenience than anything else. The attorney should be close by so as to enable him/her to step in quickly. In addition, he/she should have a good understanding of your assets and investments in order to make the best decisions possible for you.
- Decide if there are any particular powers that you would or would not like your attorney to have. As a trustee, your attorney’s powers are limited by the provisions of the Trustee Act. These powers are quite restrictive and you may want to expand them to give your attorney greater flexibility.
- Choose a lawyer you are comfortable with to prepare your Power of Attorney.