Keep the Power with a Power of Attorney

Most of us will have a will drafted at some point in our lives to ensure our wishes are carried out after our deaths. But what if illness or injury leaves you alive but unable to make decisions about your finances or your health? In this situation, your wills would not apply and you would need a power of attorney to maintain control over your person and your property.
What Are They?

With a power of attorney, you (the grantor) authorize another person (the attorney) to make decisions on your behalf. Your “attorney” doesn’t need to be a lawyer. In fact, the role is usually filled by a close family member or a trusted friend who can be relied on to carry out the grantor’s wishes and act in their best interest.

There are two main types of powers of attorney.

A power of attorney for property lets your attorney manage your financial affairs. The attorney’s authority can come into effect immediately and continue in the event you become mentally incapable – a so-called “continuing” power of attorney for property. It can also be limited to certain dates or can be made to lapse if you become incapable – an “ordinary” power of attorney. Ordinary powers of attorney are often used when people need someone to act for them while they are away on a vacation or business or if they want to have a different attorney act for them if they become mentally incapable. Your attorney’s authority can be broad or it can be restricted it to certain types of transactions, such as banking or the sale of a particular piece of property.

A power of attorney for personal care lets your attorney make decisions about your health care, nutrition, shelter, clothing, hygiene, and safety if you become incapable of making these decisions yourself. As with the power of attorney for property, you can restrict your attorney’s authority to certain types of decisions or give them broad authority to act in your best interest as they see fit. It’s increasingly common for powers of attorney for personal care to contain “living will” directions. These instruct your attorney how to deal with such difficult issues as the use of “heroic measures” to maintain your life or other medical procedures you may or may not wish used.

Powers of attorney end with your death. At that point, authority for your property is handed over to your estate executor and trustee. It’s important to note that your attorney can’t draft a will for you. So if you haven’t drafted a will already, you should consider doing one at the same time as you draft your power of attorney.

The Three C’s

The benefits of having powers of attorney can be summarized with three C’s.

The first C is control. Powers of attorney can ensure that, if you become incapable, decisions about your property and health will be closest to those you would make yourself.

The second C is certainty about who will make decisions for you. If you are declared incapable of managing your property without a power of attorney in place, the province’s Public Guardian and Trustee is automatically appointed your statutory guardian of property with the power to make decisions about your property for you. While a friend or family member can then apply to replace the Public Guardian and Trustee as guardian, this process takes time, paperwork and patience.

Without a power of attorney for personal care, a ranking system set out in a statute will determine who among your next of kin makes your health care decisions. Depending on how well this person knows you, they may be making decisions without the benefit of knowing what you would do if you could speak for yourself.

In both cases, if there is any dispute over who should make these decisions, it can lead to complex and stressful court applications. All of which leads to the third C – costs. As with a will, spending a little money on a power of attorney now, could save you and your loved ones big legal bills later.

Jason Murphy practices family, civil and estates litigation at the law firm of Christie/Cummings in Collingwood. Questions and topics for future articles can be sent to [email protected]. Please note that this article is only an overview and is not legal advice. Consult a lawyer before taking any action.