Why you need a power of attorney

Powers of attorney are an important part of a comprehensive estate plan. Yet many people who go out of their way to make sure their wills are up to date do not have a power of attorney in place. Failure to do so can have serious consequences.

A power of attorney is a written agreement between you and someone you trust.  It empowers that person to do certain things on your behalf while you are alive, if you are unable to do so yourself.  The person granting the power is called the donor.  The person to whom power is granted is called the donee.
A power of attorney is a legal document, and it is signed before two witnesses.  These witnesses should never be family members, nor anyone else who has an ‘economic interest’ in your estate.

English law roots
The power of attorney has its roots in English common law.  An individual had the right to appoint an agent, either orally, or by written contract, to perform certain acts on their behalf.  If the agent was to execute a document ‘under seal’, their own appointment had to be by a deed. In other words, it too had to be in writing, and ‘under seal’.  The modern power of attorney evolvefrom that deed.

Like wills, this area of the law falls under provincial legislative jurisdiction, so there will be differences from province to province.  Consult a lawyer on your province’s specific provisions.  In particular, the circumstances in Quebec are quite distinct.

Why necessary?
While many Canadians are fairly clear on what a will is, and the purposes it serves, they are much less clear on the need for well thought out, properly executed powers of attorney.
We tend to think in terms of absolutes.  Either we are alive or we are dead.  In fact, there is a great statistical likelihood that you will be disabled at some time during your life.  An accident could leave you paralyzed or in coma.  A sudden, severe illness such as stroke or heart attack could likewise render you incapacitated.  If it were severe enough and long enough, you may not be able to make decisions for yourself or your loved ones during that period of incapacity.  Take a moment to imagine the difficulties this could create.

A power of attorney for property takes effect from the moment that it has been signed and witnessed.  It remains in force until it is revoked (assuming you still have the requisite mental capacity), or until your death.  At the moment of your death, your power of attorney ceases to have legal standing, and your will becomes the means whereby you to express your final wishes.

For personal care
A power of attorney for personal care differs somewhat, in that it takes effect when those whom you have chosen to look after you decide you no longer have the capacity to look after yourself.  There are limits on this authority, however, and you do not lose the right to question what is being done for you.

As with any element of an effective financial or estate plan, things should be done well before there is an actual need.  This is particularly so as it relates to powers of attorney.  You may execute a power of attorney only while you are of sound mind, and can understand what you are doing.  Once you have become mentally incapacitated, it is too late to execute a power of attorney.  And that is precisely the time when one will be needed, to ensure that your affairs continue to run smoothly, especially for the benefit of those who depend upon you. 

So don’t delay. If you don’t have a power of attorney in place, take steps to remedy that now.