Clients are often surprised by the range of estate planning tools available. Aside from creating a will to distribute property after your passing, there is other documentation that you should consider preparing, such as a power of attorney. Having a valid power of attorney in your estate plan will allow others to make decisions on your behalf if something happens and you cannot do so yourself.
In a recent blog post, we briefly discussed powers of attorney. This blog post will dive further into the world of powers of attorney in Ontario, providing detailed explanations as to what they are, what types are available, and how they can benefit your estate plan.
What is a Power of Attorney?
A power of attorney is a legal document that grants another person (the “attorney”) the authority to manage your money and property on your behalf during your lifetime.
A power of attorney is typically used in cases where an individual wants to ensure that a trusted person or organization can manage their affairs in the event that they become unable to do so themselves. Generally, the appointed attorney will step in if the individual lacks the physical or mental capacity to manage their affairs themselves.
Types of Powers of Attorney in Ontario
Attorneys have different powers depending on the specific type of power of attorney created; therefore, it is important to have a sound understanding of the different options that are available before preparing the document. Working with an experienced estate planning lawyer will also allow you to ensure that your questions are answered and that you have sufficient information to decide on the best power of attorney for your circumstances.
Some of the common types of powers of attorney are explored in further detail below.
Power of Attorney for Property
A power of attorney for property will make decisions relating to finances and physical property on your behalf. For example, depending on how a power of attorney is drafted, a power of attorney for property may be able to:
- pay your bills for you;
- manage your finances (including investments); and
- manage and sell your property.
Power of Attorney for Personal Care
A power of attorney for personal care will allow your appointed attorney to make decisions relating to your personal care and welfare. This could include decisions relating to your health care, living arrangements, meals and clothing.
Duration of a Power of Attorney
Beyond choosing the specific types of decisions you want your attorney to make, you can also specify the period of time during which the power of attorney will be effective.
Non-Continuing Powers of Attorney
Non-continuing powers of attorney are valid so long as the individual granting the power is mentally capable of managing their affairs. Non-continuing powers of attorney are often used in cases where the grantor is physically incapable of making decisions (for example, if the grantor lives in one area but requires help managing their affairs in another area).
Enduring Powers of Attorney
Enduring powers of attorney are valid even when the grantor becomes mentally incapable of managing their affairs. In some cases, grantors may specify that an enduring power of attorney only becomes effective when they become mentally incapable of managing their own affairs.
Limited Powers of Attorney
Limited powers of attorney are just that—limited to particular durations or particular scenarios. For example, if a grantor intends to sell a property but will not be physically present during the transaction, they can create a limited power of attorney granting their attorney authority to act on the grantor’s behalf with respect to the sale.
Choosing an Attorney in Ontario
In addition to the type of power of attorney you decide to prepare, it is also important to think about who you plan to appoint as your attorney. Given the significant amount of power granted to an attorney, it is critical to choose a trusted individual or organization and to make them aware of your intentions to appoint them as the attorney beforehand.
Often, individuals will designate a trusted family member, spouse, or friend in their power of attorney. However, in some situations, individuals may choose to appoint a third party as their attorney, such as a lawyer or a company.
Why Do I Need a Power of Attorney?
Regardless of age or life circumstances, preparing an estate plan is important. While many people are concerned about preparing a will to ensure their affairs are managed after their death, generally, fewer people give thought to what might happen during their lifetime that might also impact their ability to manage their property and personal care decisions. Having a power of attorney can provide peace of mind and assurance that your affairs will be handled appropriately if a time comes when you are unable to manage them yourself.
Additional benefits of a having a power of attorney in your estate plan includes:
- Flexibility. Grantors can provide their appointed attorneys with a wide range of powers to help manage affairs or make decisions either in any situation or on a specified occasion. A power of attorney provides an additional layer of protection and security in the event of a complex or unexpected situation.
- Protection. While the idea of granting another person the ability to make decisions on your behalf may sound concerning to some, a power of attorney can provide you with relief, knowing that you have appointed a trusted individual to make these decisions for you. In the event that something happens and you do not have a power of attorney, it is not guaranteed who will take on this responsibility.
- Saves time and money in unexpected situations. For example, if you become mentally incapable of managing your affairs or personal care and you do not have a power of attorney in place, your family may need to apply to court to obtain authority to act on your behalf. This process can become expensive and time-consuming.
The Estate Lawyers at Campbells LLP in Oakville Will Help You With All Your Estate Planning Needs
The knowledgeable estate planning lawyers at Campbells LLP have been helping clients navigate complex estate planning and estate litigation since 1999. Whether you are looking to prepare your first estate plan or life circumstances require you to update your existing documents, our lawyers are ready to help. Our team works to provide clients with efficient and tailored solutions for their unique needs. Contact us online or call us at (905) 828-2247 to speak with a member of our team to determine how we can assist you.