There are several situations where you would want to have a Power of Attorney (POA) in place in the event something was to happen to you. For example, someone in the military who is being deployed overseas may want to appoint a POA in the event they become incapacitated while they are away. A single person who travels a great deal might set up a POA so that someone can handle their affairs in their absence. However, POAs are most commonly established when someone is elderly and starting to experience memory loss or face another long-term health crisis.
According to the Alzheimer’s Society of Canada, currently there are over 747,000 Canadians suffering from Alzheimer’s or a similar condition that causes dementia and leads to mental incapacity. One third of Canadians know someone who has Alzheimer’s, and the situation is only getting worse. It is expected that by 2031 there will be over 750,000 Canadians suffering from Alzheimer’s or a related illness.
A Continuing Power of Attorney for Property is one common way to protect the assets. This is a legal document where a person gives someone else the legal authority to make decisions about their finances if they become unable to make those decisions themselves. It is important to know that having a POA does not stop you from looking after your own affairs while you are capable. You can stipulate that the POA doesn’t come into effect until a certain date or until your doctor provides a letter stating that you are mentally incapable of making decisions.
One of the biggest decisions to be made when considering a Continuing Power of Attorney for Property is who should be the new decision-maker. An Attorney could be granted a great deal of power. For example, if a father names his son to be the POA, the son could pay bills, manage investments and real estate, sign documents for the father and even sell his home. Assigned powers can also be limited, for example you could provide your Attorney with full decision-making authority with respect to your bank
accounts and investments, but prohibit him from making decisions about your real estate.
Anyone over the age of 18 can be named an Attorney. If you appoint more than one person, the two Attorneys will have to make decisions together; unless you specifically give them permission to act separately. If you name two people there could be the potential for disagreements between them on what to do with your property. If you name your two children, handling your affairs could cause friction between them. To avoid disagreements between siblings, you could also name a Trust Company which would act as your Attorney for a fee. Any Attorney named is entitled to a payment based on a government mandated formula, but you can prohibit payment in your Power of Attorney document.
There are many serious issues to be considered when granting a Continuing Power of Attorney for Property. Although it is not necessary, I would advise you to consult with your lawyer to ensure the document is designed to work in your best interest. If you want someone to discuss your situation with and help you make the best decisions for your family, don’t hesitate to give me a call.
Have a great weekend,
Tracey
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