Who will be your lookout?

More than half of Canadians have taken the time to draw up a will and name a representative to wrap up their financial affairs.

Many others have failed to ensure that someone they trust will have the legal authority to make financial, health and personal decisions on their behalf if they become unable to make these decisions for themselves.

When planning for incapacity, there are two main documents you can use to name people who will make decisions for you.

  • The first relates to financial matters, such as paying your bills, completing your tax returns and making investment decisions
  • The second is for matters related to your personal care and health.

No automatic right
Contrary to what many Canadians think, your immediate family and those close to you do not have the automatic right to manage your finances or make long-term medical decisions on your behalf if you become mentally incapacitated.

These documents give others power over your affairs and should be regarded seriously. To protect yourself from abuses of this power, you should name people you trust and take advantage of the available safeguards/p>

I know of one family who experienced such abuses when the eldest daughter was given the power of attorney for her mother’s finances. Rather than acting in her mother’s best interest, she slowly and methodically transferred the assets into her own name. By the time her sisters tuned into what had been happening, the legal system was their only course of action.

In general, there are two aspects of your life that should be addressed in case of incapacity:

  • Financial matters
  • Personal and health care

Financial matters:
A financial management document may go under different names in different provinces. But the intention behind it is similar–to enable you to name someone who will make financial decisions on your behalf.

Who’s who for property
Province Name of representative Name of document
Alberta Attorney Enduring power of attorney
British Columbia Representative Representative agreement for property or finances
Manitoba Attorney Springing power of attorney
New Brunswick Attorney Power of attorney
Newfoundland Attorney Enduring power of attorney
Nova Scotia Attorney Enduring power of attorney
Ontario Attorney Continuing power of attorney for property
Prince Edward Island Attorney Power of attorney during legal incapacity
Quebec Mandatary Mandate given in anticipation of incapacity
Saskatchewan Attorney Enduring power of attorney

Source: The Estate Planning Workbook: A Companion to You Can’t Take It With You, Sandra Foster (John Wiley & Sons, 2002)

Next page: Who does what?

Who does what?
Without a financial management document, should you become unable to make your own decisions, someone under a court order or from the office of the provincial public guardian or trustee will make or oversee the decisions for you.

Unless you specify otherwise, this document authorizes your “attorney” to act on your behalf for any financial activity except to prepare or change your will.

And the person(s) you appoint has authority to act on your behalf only while you are alive. 

Devil in the details
Upon your death, this authority stops and your executor takes over. While you may name the same people to act as your attorney and your executor, their legal authority is derived from different documents.

In some provinces, you also need to specify whether you want your document to endure–in other words, continue to be valid–in the event of your incapacity. Otherwise, strange as it may seem, the document could automatically be revoked just when you want it to be put into effect.

If you’ve signed a financial power of attorney at your bank, be aware it only covers the assets you hold there. You may need a more general power of attorney document that covers your other assets. But make sure one doesn’t revoke the other.

Personal and health care:
In most provinces, you can also name someone to make decisions related to your personal and health care. Generally, this person is called upon when and if you become incapable of making these decisions for yourself.

While legislation continues to evolve in this area, the person you appoint and the document itself also go by different names in different provinces.

Who’s who for personal and health care directives
ProvinceName of RepresentativeName of Document
AlbertaAgentPersonal directive
British ColumbiaRepresentativeRepresentative agreement for health care
ManitobaProxyHealth care directive
New BrunswickAttorney for personal carePower of attorney for personal care
NewfoundlandSubstitute Advance health care directive decision-maker
Nova ScotiaDeemed guardianAuthorization to give medical consent
OntarioAttorneyContinuing power of attorney for personal care
QuebecMandataryMandate given in anticipation of incapacity
Prince Edward IslandProxyHealth care directive
SaskatchewanProxyHealth care directive

Source:  The Estate Planning Workbook: A Companion to You Can’t Take It With You, Sandra Foster (John Wiley & Sons, 2002)

Next page: Living wills

Living wills
A living will is not a will nor is it strictly about living. Rather it is a type of advance medical directive detailing your wishes for your care in the event you’re unable to speak for yourself.

Unlike a power of attorney for personal care, it does not give someone else the authority to speak for you. A living will or other advance medical directive could be prepared using a separate document. However, many people now include their wishes regarding types of health care and medical intervention, including the right to receive or refuse treatment, in the document for personal and health care.

Potential for abuse
To reduce the potential for abuse, certain people are excluded from acting as your decision-maker for health care matters in some provinces. Exclusions include your doctor, nurse, landlord and social worker.

Residents of B.C. also have the legal right to appoint a monitor to oversee the decisions of their personal representatives.

It can be difficult to anticipate becoming incapacitated some day. The proper documents allow you to give someone you trust to make sound financial, personal and health care decisions that are in your best interest.

This way, you decide who decides.