Setting up estate plans and end-of-life plans can be extremely challenging for most of us. Many people also tend to avoid this subject because it can be difficult to think about it. That being said, it’s incredibly important to set these plans to ensure your interests are protected.
Setting up a power of attorney can be a crucial step when it comes to making sure our wishes are followed when we don’t have the ability to make our own decisions. That’s because these documents ensure we have someone who has the legal authority to act on our behalf to ensure our interests are safeguarded.
However, setting a power of attorney can also be a complex task that entails various processes and decisions to make. For example, how do you choose an agent? What are the processes and legal requirements? Moreover, how much power should one give their agent?
In this blog, we will discuss everything you should know about setting a power of attorney. We will cover the benefits and drawbacks, different types of POA, how to choose an agent, ways to revoke one, and more.
If that piques your interest, keep reading to learn more.
What Exactly Is a Power of Attorney?
In Ontario, a power of attorney (POA) is a legal document, allowing individuals to appoint someone to manage their estate. The document grants the appointed person (known as an agent, or an attorney-in-fact) the authority to represent them and make decisions on their behalf. This can include management of their property, medical decisions, financial affairs, and more.
The power of attorney documents can be beneficial to Canadians who want to make sure their interests are safeguarded. After all, the main reason to set a power of attorney is to ensure an individual’s wishes are carried out when they’re unable to do so themselves. This is especially true in event of disability, aging, or incapacity. It can even be utilized when an individual is away travelling.
However, the most common use for the power of attorney documents is when someone’s health or mental capacity fails. These healthcare power of attorneys, also referred to as a living will or medical directive, enable the appointed agent authority to manage life or healthcare situations. These usually include decisions regarding medical treatments, organ donation, and end-of-life care, among others.
Another important reason to set a power of attorney is to manage finances. Financial POA documents give the appointed agent the ability to make financial decisions on behalf of the principal. These can include decisions regarding payment of bills and debt, managing their bank accounts, and investing in assets.
Overall, the role of setting power of attorney documents is to ensure a legal framework is in place for individuals unable to make important decisions.
Types of Power of Attorney Documents in Ontario
Numerous types of power of attorney documents exist to serve varying purposes. In Ontario, there are only two main kinds of POA available for an individual to give someone.
- Power of attorney for property
- Power of attorney for personal care
These main types entail a wide range of responsibilities. Let’s discuss them in detail.
Power of Attorney for Property
A power of attorney for property is a legal and binding document that grants the appointed agent the authority to manage the principal’s finances and assets. It is set to be utilized when the principal is unable to make these decisions for themselves. That’s why it’s particularly useful for aging individuals who are unable to manage their finances, or for those who can’t do so due to health-related reasons. It can even benefit people who have been incapacitated.
The authority granted to the agent depends completely on how much power they are given. For example, an agent is given a power of attorney that covers all finances, or a more specific POA that entails the management of only some affairs. These are the sub-types of the POA of property.
According to Canadian laws, there are two main types of power of attorney for property and finances.
- General power of attorney
- Continuing or enduring power of attorney
General power of attorney is a written, signed, dated, and witnessed legal document that grants the appointed agent broad authority over the principal’s matters. This means that they can make decisions on all or some of their finances. The type of POA enables an individual to ensure their finances and property are managed even when they are unable to do it.
General POA is a flexible tool that principals can customize to meet their specific requirements. Depending on the principal’s needs, this type of power of attorney for property can be used for a designated period of time or for a certain transaction. It can also be used generally or for a more specific purpose.
The limited general power of attorney can enable the principal to handle a limited task, for example selling a property.
On the other hand, the continuing power of attorney for property is a legal and binding document that enables the agent to continue acting for the principal. This is usually done when the principal becomes mentally incapable of managing their property and finances. A continuing power of authority document takes effect as soon as it is signed.
Power of Attorney for Personal Care
A power of attorney for personal care is a legal written document that grants the appointed agent the authority to make decisions on the principal’s healthcare. This can include decisions regarding healthcare, medical care, diet, housing, hygiene, and more. Individuals usually set this power of attorney for when they are unable to make decisions for themselves due to illness, injury, incapacity, etc.
The agent who is granted the POA is usually a trusted loved one, such as a family member or a close friend. That’s because the main reason behind setting this power of attorney is the principal’s and family members’ peace of mind.
Benefits of Setting a Power of Attorney
There are many benefits that come with setting a power of attorney; we have listed some of them below.
Practical and Effective
The first reason to set a power of attorney is that it’s a practical and safe way to manage estate and finances. It ensures an individual’s affairs are managed even if they’re mentally unable or incapacitated. The agent is also bound by the law to account for the management of the assets. In this way, they can’t take advantage of the power or fail to keep up with their responsibilities. This makes it a practical and effective choice.
It’s a Great Estate-Planning Tool
Setting a power of attorney can be a critical part of overall estate planning. That’s because, by appointing an agent, the principal can ensure their wishes are respected and followed. This means that their assets should be distributed how they want.
Another great benefit of setting a POA is that it’s flexible. The principal can appoint a single agent or more than one. They can also decide if attorneys can act jointly or separately.
Steps to Setting a Power of Attorney
Finally, we have listed the steps to setting a power of attorney below.
- Selecting the attorney
As we have mentioned, you can choose one or more attorneys. However, it’s imperative you choose the person who is responsible, trustworthy, and has your best interest at heart. You should also take into account if the person is up for the job by discussing the responsibilities totally.
- Write the POA
Ensure your POA has all the important details such as the agent’s name, their scope of authority, your wishes and requirements, signatures, etc. Though you can draft your own POA, attorneys can ensure your document is complex. They have experience creating these documents, so they know what to include.
- File the POA
It’s imperative that you sign and execute your document to make it legally binding. This means that you have to sign it, ensure it’s witnessed, and get it notarized.
If you wish to set a power of attorney, it’s essential you consult with qualified legal professionals. At Nanda & Associate Lawyers, we offer consultations with knowledgeable lawyers to help you navigate the process and ensure your wishes are properly managed.
Our wills and estate lawyers in Brampton, Toronto, and Mississauga specialize in estate planning laws to provide guidance on setting power of attorney. We aim to handle all complexities to ensure your power of attorney document is according to your wishes.
Our firm also offers legal services related to business lawyers, immigration lawyers, real estate lawyers, and federal court lawyers.
Contact us now to get started or to learn more about us.
Disclaimer: This article is only intended for educational purposes and shouldn’t be used as a substitute for legal advice.