Did you know that it’s not a given that your family (even your spouse!) will be able to sign legal papers for you if you get sick?
What is a Power of Attorney?
A Power of Attorney is a document that appoints someone you trust to help you with your legal and financial affairs.
The person you name (called an “Attorney”) can help you pay bills, buy or sell property like your home or your car, deal with your bank accounts, pension or taxes.
We use the word “Attorney” in Canada to refer to the person you have appointed under a Power of Attorney – in this case, the word “Attorney” doesn’t mean “lawyer”, as you sometimes hear on television.
An Attorney follows your instructions, and acts in your best interests. An Attorney must carry out a series of legal obligations set out in the Power of Attorney Act, and must follow any instructions set out in the Power of Attorney document itself.
If you become incapable at some point in your life, and your Power of Attorney document is an enduring Power of Attorney, your Attorney can continue to act on your behalf even if you lose capacity. If your Power of Attorney document is NOT an enduring Power of Attorney, then your Power of Attorney will terminate upon your incapacity.
Why should I make a Power of Attorney?
A Power of Attorney is an important document, because without it, we can’t tell who we should be listening to when it comes to dealing with your legal and affairs.
Should we listen to your spouse, who you’ve been married to forever and ever? What happens when your spouse doesn’t know how to balance a chequebook? What happens when this is your third spouse, and you’ve only been married for 2 months? What happens when your spouse is just as frail as you?
Should we listen to your children instead of your spouse? That might work if your spouse is the other parent to your children and everyone is getting along, but what happens when your children hate their step-parent?
What happens when you have more than one child – how do we tell which one we should be listening to?
As you can see, it can be treacherous for outsiders to try and figure out who among your family and friends we should be relying on when it comes to your assets. The liability for an asset-holder who gets it wrong is significant. So we don’t even bother trying now.
In some cases, like dealing with your home or your vehicle, it may be impossible for your family to deal with those assets without a Power of Attorney. Government agencies (especially those like the Land Title Office, which has a guaranteed title system) are simply not willing to put these larger assets at risk without proper authority.
What happens if I don’t have a Power of Attorney?
If you don’t have a Power of Attorney, then much depends on who is managing the legal or financial issue you need help with, and their value.
For example, any asset that is managed by a government registry will usually require a Power of Attorney to allow someone else to deal with your affairs.
If you don’t have a Power of Attorney and you are not capable yourself, then your accounts and assets could be frozen; your assets might remain frozen until you appoint someone using a Section 7 Representation Agreement, or someone goes to court and gets appointed as a committee.
Spouses might be able to sign for each other on joint accounts under a certain dollar number, but anything over that dollar number might require a Power of Attorney.
Again, if you don’t have a Power of Attorney, a Section 7 Representation Agreement or Committeeship Order might allow someone else to deal with certain aspects of your legal and financial affairs.
Ask us for information on how a Power of Attorney could benefit you.January 3, 2018 10:39 pm
Tags: estate planning, financial affairs, power of