Congratulations! You’ve just bought a new home.
You’ve spent hundreds of thousands of dollars (possibly even a million or more) on your lovely new home. You’ve protected it with property insurance, title insurance and possibly even mortgage insurance.
But there is one more thing you need to do to protect your investment. Make a Power of Attorney.
Did you know that no one can properly sign legal documents on your behalf without a Power of Attorney? Even if that other person is your spouse and they are on title to your home with you?
This is something that most people don’t know.
Why do you need a Power of Attorney?
A Power of Attorney appoints someone to look after your legal and financial affairs.
The person you appoint is called an “Attorney”. In Canada, we use the word “Attorney” to mean “agent”. It doesn’t mean “lawyer” like you might hear on American legal shows.
You don’t have to be completely mentally incapable to need a Power of Attorney – you might want to have an Attorney help you if you are feeling unsure, or vulnerable, or if you are just experiencing physical (not mental) difficulties.
Who should you appoint as your Attorney?
You can appoint a person or a trust company to be your Attorney.
Your attorney should be 19 years of age or older.
Ideally, you would pick someone who:
- understands your financial situation and your family needs
- is geographically close to you
- has the time and ability to help you with your finances
What is an Attorney’s job?
An Attorney’s duties are set out in the Power of Attorney Act.
An Attorney can help you if:
- you are feeling insecure about reviewing and signing legal documents all by yourself
- you have had a catastrophic medical emergency and you have lost the ability to understand the nature and consequences of your actions
- you are away out of the country and cannot sign legal documents where you are
Some of the things your Attorney can help you with are:
- list your house for sale if you want to downsize or realize on the equity in your home
- sign the legal documents needed to sell your house
- make mortgage payments, pay off your mortgage (and clear it from title), or refinance your property
- clear nasty charges from title like liens or judgments
- remove deceased owners from title
- deal with taxes such as property taxes, empty homes taxes or speculation and vacancy taxes
- deal with utilities accounts
- deal with rentals
So what happens if I don’t have a Power of Attorney?
Here are some of the things that can happen if you can’t sign for yourself, and you never appointed someone as a Power of Attorney:
- your family might be able to pay your ongoing maintenance and expense bills for you from their own funds, but that will get expensive for them – do they have enough money to pay for your bills on top of theirs?
- your ongoing maintenance or expense bills might go unpaid (utilities accounts might be turned off, for example, or taxes go unpaid)
- your mortgage payments might not be paid, putting your mortgage into default
- your property taxes might not be paid, resulting in fines, penalties and potentially sending your mortgage into default
- fees for strata or park maintenance would go unpaid, resulting in potential liens or charges on your title
- you can’t sell the property and access any equity in it for your care
- you can’t rent the property out, or deal with existing rentals
- your property insurance might go unpaid, putting your property at risk for damage from fire, floods or other insured problems
No, your family can’t just sign for you.
Unfortunately, if you are not able to understand the documents which are needed if you have to sell or refinance your home, no one else has the right to sign for you without a Power of Attorney.
For example, if you and your spouse own a home together, and it’s time to sell the home because your spouse needs to go into care, you can’t sign for your spouse (even though you are on title to the property as a spouse) without a Power of Attorney.
It’s not just for old people!
There are many reasons why you might want to make a Power of Attorney before you get to an age where most people start to think about these things.
If you travel out of town for work or school, it could be difficult to get documents to you wherever you are to sign.
You can have a car or motorcycle accident at any time, and through no fault of your own. If that happens it might be difficult for you to physically sign or to understand what needs to happen.
You can have a catastrophic health incident at any time with no warning.
It’s not enough, by the way, that you can physically hold a pen to sign – you need to be able to understand what you are signing.
Thinking of waiting until your doctor tells you to get a Power of Attorney? Don’t. You have to be legally capable of making a Power of Attorney. By the time your doctor has identified that you should be “getting your affairs in order”, or putting a Power of Attorney in place, it’s usually too late.
Okay. So how much does a Power of Attorney cost?
What it won’t cost you:
Far, far less than having to get a court order to appoint someone to deal with your legal and financial affairs, which is what has to happen if you don’t have capacity and you never appointed someone as your Attorney. Costs for such a court order could range from $5,000 to $20,000.
This is a one-time cost that you pay – you don’t have to pay it annually (like you do with property insurance) or monthly (like mortgage or life insurance).
What it might cost you:
Making a Power of Attorney will likely cost you somewhere between $300-$1,000 depending on how many documents you need, and how complicated your life is.
Most people pay between $300-$500 for a standard Power of Attorney.
How do you make a Power of Attorney?
It’s easy. Call us. We’ll set you up with an appointment to come in and give us instructions.
Then you’ll come back and see us to review and sign the documents we have drafted for you. If you’re happy with the documents, you sign them, and you’re done. If we need to make changes, we’ll do that.
Take this one last step to protect your investment in your new home. Make a Power of Attorney.October 16, 2019 2:59 pm
Tags: BC Notary, house, Lawyer, Power of Attorney, protection