What is a Power of Attorney?
A Power of Attorney is a document that grants a person you have appointed as your attorney with full or limited authority over your real estate, legal, and financial affairs on your behalf. Appointing a Power of Attorney is a form of advanced care planning that ensures somebody can look after your affairs if you become incapacitated. The appointed attorney should be a trusted person who fully understands the roles and responsibilities involved and who will act in your best interest.
Who can be my Attorney?
Your Attorney should be someone you can trust to take care of your assets if you become incapable of making these decisions yourself. This can be a spouse, family member, or close friend. In British Columbia, and across many other Canadian provinces, the minimum legal age for an attorney is 19. They must understand the duties of an Attorney and be mentally capable of managing your affairs while acting in your best interest. An Attorney’s authority generally starts when the Power of Attorney is signed. However, this can vary depending on what is stated in the document.
Type of Powers of Attorney
There are two main types of Power of Attorney commonly used – a general Power of Attorney gives your representative the authority to make decisions on your behalf while you are still mentally capable of managing your own property and finances. The general Power of Attorney ends once you become mentally incapable of these decisions.
An enduring Power of Attorney can then come into effect (or as soon as it’s signed, depending on what is specified in the document) as a legal document that lets your representative act for you if you are mentally incapable of managing your own affairs.
The power given can either be very broad to allow complete control over all of your finances and assets, or it can be limited to a specific task or for a specific period of time. For instance, you can appoint someone as your attorney, while you are out of the country, who will manage banking, insurance, or property issues. A Power of Attorney can be revoked at any time as long as you have the mental capability to do so. If you intend to revoke a Power of Attorney, a notice must be given to your attorney or any financial institutions that your attorney has on behalf of you.
Benefits of having a Power of Attorney
There are many benefits of appointing a Power of Attorney. You can be specific with your requests including the number of attorneys you have, and whether you want them to act together on making joint decisions or separately. You can decide which assets they have control of and how long they have control of these assets too. Without a Power of Attorney, it can be a long and expensive process of going through the courts, therefore appointing a Power of Attorney is a beneficial reassurance to have in case your situation and mental capabilities change.
Risks of having a Power of Attorney
Although having a Power of Attorney is recommended, there are always challenges that can appear. Ensuring your Power of Attorney is someone you can trust is very important to make sure decisions are all made in your best interest. Without having a trustworthy appointee, the mismanagement of money and property can occur. Having multiple attorneys can sometimes lead to disagreements and delays, which is why it’s important to have direct and specific requirements outlined in the document so everybody agrees with the affairs.
To avoid the potential risks, it’s recommended to tell family or friends about your personal planning so others are aware and can look out for any signs of this power being abused.
Notarizing Power of Attorney in BC
Although often associated with end-of-life care, having a Power of Attorney offers an extra layer of protection in the event you become mentally incapable of making decisions, regardless of age.
To grant someone your Power of Attorney, notarization is not a requirement. However, you may wish to do so if you own land or property that your attorney may act on behalf of or try to sell. Witnesses must be present to witness the signing of these notarizations and in British Columbia two witnesses are required, unless one of them is a lawyer or authorized notary public where one is sufficient.
FAQ
Can I change my mind and revoke my Power of Attorney
Yes – if you are still mentally capable of making these decisions, you can revoke your Power of Attorney by writing a Statement of Revocation which allows you to revert your decision and appoint a new Power of Attorney if you wish.
What a Power of Attorney can’t do?
General and enduring Powers of Attorney can’t make health or medical-related decisions. In British Columbia, these decisions are covered by Representative Agreements which is a tool that allows your appointed representative to make personal and health care decisions on your behalf in the event you are not able to communicate these.
Difference between Power of Attorney and a Will
A Power of Attorney becomes invalid once a person dies and the executor in their will is then granted control over their estate.
If you’re looking to set up your Power of Attorney or have any general questions about the process, please don’t hesitate to get in touch, we are more than happy to help you with this process.