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What is a Power of Attorney?

Estates & Trusts, Wills | May 20, 2020 | Written by Emily Anderson

What is a Power of Attorney?

A Power of Attorney is a legal document that allows you to give legal authority to a trusted person (your “attorney”) to manage your legal and financial affairs while you are still alive. There are a few different types of Powers of Attorney: General, Springing and Enduring.

A General Power of Attorney becomes effective immediately, but ceases to be effective when you lose mental capacity.

A Springing Power of Attorney only comes into effect if you lose mental capacity and usually requires that the attorney produce declarations from one or more medical doctors in order to become effective.

An Enduring Power of Attorney becomes effective as soon as it is signed and continues to be effective throughout any mental incapacity you may suffer. This is the most common type of Power of Attorney and the most useful.

All Powers of Attorney cease to be effective on your death, at which point your Will takes effect and your Executor becomes the representative of your Estate.

What can my attorney do for me?

Your attorney can stand in your shoes for legal and financial purposes. Your attorney can enter contracts on your behalf (including contracts to buy and sell real estate), make financial decisions for you, act on your behalf with Canada Revenue Agency, etc. An attorney cannot make or change a Will for you, nor can attorney change your designated beneficiary on a life insurance policy.

Why is it important?

A valid, up-to-date Power of Attorney is just as important as a valid, up-to-date Will. The Power of Attorney applies while you are still alive in the event in the event you cannot or do not wish to act on your own behalf. A Will does not take effect until death.

If you own real estate with a joint owner you need a Power of Attorney. There is no automatic right for a spouse or joint owner to act on your behalf to enter into legal contracts or register documents at the Land Titles Office. Your spouse may only sign on your behalf with a valid Power of Attorney.

What happens if I don’t have one?

If you do not have a Power of Attorney and you no longer have capacity to appoint someone on your behalf, a trusted friend or family member will need to apply to the Court for an order for Committeeship. Whereas a Power of Attorney can be drafted in a few days for a relatively small fee, an order for Committeeship takes several months to obtain and usually involves multiple medical reports and court appearances. Due to partial closures of the B.C. Supreme Court as a result of COVID-19, it is not clear at this time how long it would take to obtain an order for Committeeship, but it is likely in the range of around 6 months.

Who can I ask to be my attorney?

Anyone who is at least 19 years old can be your attorney. Often people appoint their spouse, their adult child or another friend or relative. It is prudent to name more than one attorney so that if one dies, becomes incapable or resigns, the alternate attorney can step into the role. The most important factor to consider in appointing a power of attorney is choosing someone that you trust completely, as your attorney holds a lot of power.

Can I revoke my Power of Attorney?

Yes, so long as you still have mental capacity, you can revoke a Power of Attorney at any time and replace the attorney you had originally named.

Does my attorney have authority to make medical decisions?

No. In British Columbia, a Power of Attorney does not cover healthcare or personal care decision making. A Representation Agreement may be made to appoint an agent (your “Representative”) to make decisions in regard to your health care and personal care, including where you live, what social, educational and vocational activities you participate in, and whether or not to administer life-preserving medical care.

 


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