Appointing a power of attorney is key to protecting your money if you are no longer able to. Here, how to pick the best person for the job - and what you need to know to protect yourself if things go wrong.
The best thing you can do to protect your money is to appoint a power of attorney. This gives power and permission to someone you trust to manage your money and property on your behalf, often when you're no longer able to.
Unfortunately, this decision can also backfire if the person you appointed decides to take your money and leave you penniless.
But according to Alan Goldhar at Ontario's Office of the Public Guardian and Trustee (OPGT), there are some things you can do to protect yourself.
1. Appoint more than one person
If you're not 100 per cent sure there is one person who is best to act as your power of attorney then appoint more than one person. For example, if you've appointed all of your children instead of one, they'll all have to agree on decisions.
"It's not about being mistrustful of one child over another," says Goldhar. "It's about having those who are trusted keep an eye on each other to act in their parent's best interest."
If all appointed can't agree, they need to present their arguments to a lawyer or Public Trustee to mediate.
2. Align the goals
Maybe you've named a power of attorney to take control when you're no longer capable of making financial decisions, or perhaps you're capable but think someone else can do a better job. Either way, sit down with your power of attorney (before they have control) and your investment adviser or banker to make your financial wishes clear, for now and the future.
"Often the senior's strategy is to invest for the short term so they can access the money for living expenses and not rely solely on OAS and CPP," says Goldhar. "But if a power of attorney wants to reverse the plan to a long-term investment strategy to enhance their own inheritance, then there's a problem."
But having a meeting with everyone present makes it harder for anyone to do a 360 on your wishes.
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