What is a Power of Attorney?

And Why Should You Have One?

Many people understand the importance of having a Will, but far fewer understand the equally important role played by Powers of Attorney. While a Will governs what happens after death, a Power of Attorney (POA) allows someone you trust to make decisions on your behalf while you are still alive, but unable to manage your own affairs.

In Ontario, there are two primary types of Powers of Attorney:

·       Continuing Power of Attorney for Property; and

·       Power of Attorney for Personal Care.

A Continuing Power of Attorney for Property allows someone you appoint (known as your “attorney”) to manage your financial and legal affairs. This may include paying bills, managing bank accounts, handling investments, dealing with real estate, filing taxes, or communicating with financial institutions on your behalf.

A Power of Attorney for Personal Care, by contrast, allows someone to make personal and healthcare decisions for you if you become incapable of making those decisions yourself. This may include decisions relating to medical treatment, housing, nutrition, hygiene, and other aspects of personal care.

Despite the name, a person appointed as an “attorney” under a Power of Attorney does not need to be a lawyer. Most people appoint a trusted spouse, adult child, close relative, or friend to act in this role.

Many people assume that their spouse or children can automatically manage their affairs if they become incapacitated. However, this is not always the case. Without valid Powers of Attorney in place, loved ones may be forced to bring a costly and time-consuming Court application in order to obtain legal authority to make decisions on your behalf.

Properly prepared Powers of Attorney can help avoid uncertainty, delay, family conflict, and unnecessary legal expense during already stressful situations. They also allow you to choose who you trust to make important decisions for you, rather than leaving that determination to the Court.

It is important to choose your attorney carefully, as an attorney acting under a Power of Attorney may exercise significant authority over your finances, property, healthcare, and personal wellbeing.

A properly prepared estate plan should generally include both a Will and Powers of Attorney, helping ensure that your affairs can be managed smoothly and according to your wishes during your lifetime and after your death.

If you would like assistance preparing Powers of Attorney or reviewing your Estate Plan, please book your FREE CONSULT with Tonelli Estate Law today.

***This article is for general informational purposes only and does not constitute legal advice***