A Power of Attorney is a document that you utilize to give someone else the authority to act and make decisions for you. The Power of Attorney can be for a limited time or it can be stated to have no effect unless and until an event happens, such as a future incapacity on your part, arising because of an accident, an illness, or just plain old age and infirmity.
You can give someone a Power of Attorney that is limited to a specific task. For example, if you are going out of the country and your house is for sale, you can give your lawyer a Power of Attorney authorizing the lawyer to accept an Offer to Purchase on your behalf, so long as the Offer is for a specific sum on specific terms. As long as the document is done properly, the Power of Attorney gives your attorney the same authority and enforceability as if it had been signed by you.
However, when talking about Powers of Attorney as they relate to wills and estates, we are usually talking about documents that are prepared to authorize someone else to make decisions for you, and to take actions on your behalf, relative to your goods, assets and health.
There are two types of Powers of Attorney in Ontario. One is the Power of Attorney for Property and the other is the Power of Attorney for Health Care. The first authorizes someone to act on your behalf relative to your assets and day-to-day business, banking and property. The Health Care Power of Attorney is separate and deals specifically with decisions relating to your health. In other words, if decisions need to be made for your medical care and you are no longer capable of giving direction, the Health Care Power of Attorney authorizes someone else to do it for you.
Both of these Powers of Attorney are very important. As I mentioned in the article talking about wills, there is a surprising number of people without wills in Canada. Some statistics say that more than 50% of the people over the age of 18 living in Canada do not have wills. It is almost a given that these same people do not have any proper Powers of Attorney in place.
I think that there are a number of reasons that people to do have proper Powers of Attorney. First and foremost, Powers of Attorney are part of a basic estate plan, but the majority of people in Canada do not have an estate plan and are hesitant to put one in place.
However, I think that there are also a few common misconceptions. First, a number of people that I have spoken with assume that because they are married, their spouse will automatically have authority to deal with their personal property and health care decisions. This is simply not true.
Under Ontario’s Substitute Decisions Act, 1992, your spouse does not have an automatic right to act as your Trustee or Attorney. If you do not have a proper Power of Attorney at the time of your incapacity, your family will have to apply to the Courts for an appointment to be made the legal guardian of your estate. If your family does not apply, or cannot agree on who should act as your Attorney, then the government will take on the task, and charge fees to your estate accordingly. Do you really want the government making decisions on your behalf?
Forcing your family to bring a Court application is an expensive and unnecessary process, and like all Court proceedings, it is subject to challenge by any interested party. What if your spouse, your son and your brother each believe that they are the most qualified to make decisions on your behalf relative to your assets? The cost, confusion and inconvenience can be avoided simply by putting the appropriate Power of Attorney in place now.
For a discussion of the differences between a Health Care Power of Attorney and a Property Power of Attorney, please see the articles in the drop-down menu under the heading “Powers of Attorney”.