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Power of attorney - An introduction

A power of attorney is a written legal document in which you appoint another person to manage your affairs in specific circumstances.

The individual acting as your “attorney” does not have to be a lawyer.

This person may be given the authority to do almost anything you can do, such as:

  • Handle your bank accounts
  • Get information from the Canada Revenue Agency to prepare your income tax returns
  • Insure or sell vehicle
  • Sell real estate

You are also able to restrict certain activities or include specific requests for handling your affairs.

Types of power of attorney

There are important differences between a general and enduring power of attorney:

  • Both a general and enduring power of attorney give your attorney the authority to act on your behalf in situations where you are not in a position to do so.
  • Note that under Canadian common law, a general power of attorney becomes invalid if you become incapable of making your own decisions.
  • An enduring power of attorney remains valid if you are incapable of making your own decisions.

Reasons for having a power of attorney

It’s a good idea to get an enduring power of attorney when you write or update your will. If you were to have a serious accident or illness that took away your physical or mental ability to handle your affairs, nobody would have the authority to act on your behalf. For example:

  • Your spouse would be unable to sell assets you own together, such as your home, if it became necessary to do so.
  • Your family could not access your bank accounts and pay your bills.

Eventually your family could go through a complicated and expensive procedure of applying to the Court for a trustee order, but by then the financial implications could be disastrous.

The time to get a power of attorney

The time is now. You never know when something unexpected could happen.

It’s important to note that an enduring power of attorney can only be executed while you have the mental capacity to do so. Once you become incapable of handling your affairs, you are also unable to sign the necessary documents for power of attorney.

You’ll need to make a decision about when the power of attorney takes effect. If you place no restrictions on it, then your attorney can become involved in your affairs immediately.

You may wish to execute a springing power of attorney which means your attorney becomes involved once certain events are triggered, such as your incapacity to manage your affairs.

Next steps

Although you don’t need legal advice to draft a power of attorney, it is generally a good idea to consult with a lawyer specializing in these matters. This will ensure that your wishes will be carried out exactly as you intended. You may also want to get your will and personal directive drafted at the same time.

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