Powers of Attorney
Are Your Assets Protected?
Peace Of Mind For Your Future
A Power of Attorney is an important part of a complete financial plan. A Will ensures that your financial affairs are managed according to your wishes after your death. However, only a Power of Attorney can provide for the proper management of your property and financial affairs, should you become mentally incapable or have to be absent for an extended period of time.
What Is A Power Of Attorney?
A Power of Attorney can ensure your affairs are well managed during your absence or if
you lose the capacity to manage them yourself. A Power of Attorney is a document in which
you appoint another person or trust company (the attorney) as your agent and confer authority to perform certain specified acts or kinds of acts on your behalf. A general Power of Attorney gives the authority to manage all property for your sole benefit, but it is possible
to limit that scope.
Why Do You Need a Power of Attorney?
- You may restrict the Power of Attorney to specific assets or transactions such as bank accounts, securities, business dealings or the sale of particular real property.
- The Power of Attorney may also be limited in time. For example, you might authorize your attorney to deal with your property, or some portion of it, for a specific period only, such as while you are out of the country.
- In all provinces, a Power of Attorney may also authorize the attorney to continue acting on your behalf should you become incapable of managing your own affairs. In Ontario, this is called a Continuing Power of Attorney for Property. In some provinces, it is called a Durable or Enduring Power of Attorney. In British Columbia, since September 2001, this power may be conferred under a Representation Agreement.
It is a common misconception that, in the event you lose capacity, a family member would automatically be able to deal with your property. If you have not granted a Continuing or Enduring Power of Attorney to a family member, he or she will not be authorized to manage your property without obtaining a court order or the approval of a provincial government official. This process can be costly and time-consuming, and the family member could be denied the authority to act.
Another popular misconception is that, because all of your property is held jointly with your spouse, your spouse will be able to manage your property if you lose capacity. This is not a complete plan. Your spouse may be able to deal with joint bank accounts, but would not be able to sell or mortgage a jointly-owned home or other real property. These transactions require the signature of both owners or, if one of them is incapable, the signature of his or her attorney.
Choosing the Right Attorney
Grant your Power Of Attorney to whomever you trust will do the job well. Even though the title is "attorney” you don’t have to appoint a lawyer to the role. You may choose anyone you think is appropriate, as long as that person is a mentally capable adult, or you may choose a trust company. You may also appoint multiple attorneys if you wish to do so.
Know The Requirements
To ensure that you select the right attorney, it is wise to consider the nature and complexity of the tasks they may have to perform. Once you know what may be required of your attorney(s), you should choose someone who will be able to deal with those matters personally, or a group of attorneys who will be able to work together. In addition, each attorney should be someone you trust to manage your property prudently and in your best interests.
Select Someone You Trust
With these criteria in mind, you have many options from which to choose. Your spouse,
adult children, lawyer, accountant, other family member or friend may be appropriate,
depending on your circumstances. If named as an Executor in your Will, a trust company, such as BMO Trust Company, may be a good choice for your attorney as well, especially if you require specialized expertise or there is no suitable individual to act.
Even if you decide that your spouse is the best choice to act as your attorney, it is wise to
appoint someone else to act either along with or as an alternate to your spouse. There are
several reasons for this:
For more information on Powers of Attorney, please contact us for an appointment.
- You and your spouse may travel out of the country together;
- You and your spouse may be involved in an accident together;
- Your spouse may become incapable or die while acting under the Power of Attorney on your behalf; or
- Your spouse may not be familiar with making investment decisions or the workings of your business.