For such a simple document, the Power of Attorney plays an incredibly important role in estate planning.
Although they’re often an afterthought for clients who approach me to draft their will, POAs for property and personal care are priceless if they ever need to be used following an unexpected loss of capacity. They allow a close family member or friend to take control of their affairs in the smoothest way possible.
Unfortunately, the value of POAs is something many people don’t understand until it’s too late, since they can’t be enacted retrospectively. As soon as someone becomes incapable, they are no longer able to execute a valid POA. At that point, nobody can step in until a court authorizes them to do so, which can be a terribly expensive and time-consuming process.
You can choose the same person to perform both roles, but some clients prefer to divide the responsibilities based on the skills required for each type of POA, which are explored in more depth below.
If you’re looking for some checks and balances, it’s also possible to name more than one joint attorney. But it’s probably better to have three joint attorneys than two so that a tiebreaker can prevent deadlock in the event of a disagreement over the best course of action.
Although it’s allowed, I do not recommend that clients appoint multiple attorneys “jointly and severally,” which means that either can act without the approval of the other: it’s a recipe for disaster if the joint attorneys don’t see eye to eye.
Under Ontario’s Substitute Decisions Act, attorneys for property are granted authority over the grantor’s property, including their finances and bank accounts.
In simple terms, that means your POA for property can do basically anything you can, including selling your home or liquidating your assets. The only thing they can’t do on your behalf is make a will.
And it’s the extraordinary scope of that power that calls for the appointment of a person that you have absolute trust in. if you can’t think of someone suitable, some trust companies are prepared to act as attorneys for property.
In most cases, people expect their POA for property to kick in during old age when dementia or some other condition impairs their ability to handle their own money. However, the decline in mental capacity may not always be so sudden, and the younger population is not immune to the kinds of accidents or sudden illnesses that confine people to hospital for a lengthy period, leaving them unable to make financial decisions or pay bills.
Still, a POA for property can be a tool of convenience as much as one of emergency.
In my own family, my mother asked me to act as her attorney for property, so that I could manage her real estate holdings while she travelled abroad for an extended period. She was perfectly competent at the time, but the document made it easier for me to handle utility bills and sales while she was out of reach.
For snowbirds preparing to fly south of the border for the winter, now is a great time to get a POA in place in case something happens while you’re away. If you own a holiday home abroad, you should also have a lawyer in that jurisdiction draw up an additional POA to cover your local property.
In contrast to POAs for property, those for personal care only take effect when the grantor becomes incapable, passing responsibility to their chosen attorney for decisions about health care, including nutrition, shelter, clothing, hygiene and safety.
Again, the responsibility involved means that your trust in the individual should be one of the biggest factors when choosing an attorney for personal care. Adult parents may prefer a child with medical or nursing experience to take on the role. Others may give the nod to a less emotional family member who can make tough decisions without feeling overwhelmed, or to the child that lives nearest them.
Whoever you choose, it should be someone who knows your personal preferences about issues including organ donation, resuscitation and life support following serious medical events. Everyday concerns, such as the grantor’s veganism or vegetarianism, can be just as important when it comes to food choices in a hospital or care home.
Acting as an attorney for personal care can be a difficult and potentially lengthy responsibility, so it’s worth checking that your choice is both willing and able to do the work ahead of time. Just because someone is named in a POA document doesn’t mean they have to accept the appointment, and it can cause issues if there are no alternates in place.
If you have questions about your estate plan and would like to explore your options, we would be happy to help you.