There’s lots of misunderstanding out there about “power of attorney” documents: what they do, when they’re effective, and most important, why you should have them in place.
Most people consider instructions for preparation of their power of attorney documents when they see their lawyer about a will. Your will won’t take effect until after your death. That’s when your estate trustee or executor begins the process of administering your estate, paying your debts and distributing your property. But your powers of attorney are useful before your death, if you lose your mental capacity. We don’t like to think that will happen, but for many of us it will.
If you lose your mental capacity, you will need an attorney for property to manage your financial affairs. And you will need an attorney for personal care to manage your health care decisions. You can, if you like, appoint the same person or persons to manage your property and to manage your personal health care decisions. But the documents come into force and effect at different times, so your power of attorney for property and your power of attorney for personal care will be appointed in two different documents.
A power of attorney for property comes into effect right away: that’s why it’s sometimes called a “continuing power of attorney”. You’ll probably grant your attorney for property the power to do everything you could do yourself with your property: buy and sell real estate, withdraw funds from your bank accounts, cash in investments – anything, in fact, except make a new will for you. That’s a lot of power. And it continues until you die.
So you need to choose somebody you trust absolutely. But at the time you appoint your attorney for property, you likely have no intention at all of relinquishing your own control over your financial affairs. That means you will probably want to instruct your lawyer to hold onto your attorney for property document until it’s the right time to release it. That could be when the lawyer establishes you have in fact lost capacity to manage your own affairs. Or it could be when you say so, perhaps just because you don’t want to be bothered any more. And it’s not “all or nothing” necessarily. So long as you have capacity, it’s quite possible for your attorney for property to manage your finances for some purposes while you continue to manage other aspects of your financial affairs.
Once your attorney for property starts to act, he or she should exercise the power you’ve given your attorney only in accordance with your wishes, or what your wishes would have been if you still had capacity. If you always had your hair done once a week or favoured expensive cigars, those expenses should continue even if your attorney disapproves! A power of attorney for property grants power not “in the best interests of a child” but “in the best interests of you as an adult”: including your right to waste some money, as we all do, at least within reasonable limits.
Your attorney for property must spend your money for your benefit, and be prepared to account for all spending on your behalf. This is not an opportunity for your attorney to decide to “take an advance on my inheritance” (supposing your attorney is also beneficiary of your will). On the other hand, acting as your attorney for property can be a lot of work over a considerable period of time, and you will want to think about providing appropriate compensation for your attorney for property for taking on this task.
How is your power for attorney for personal care different? Timing. Your power of attorney for personal care is only effective when you’ve lost mental capacity to make your own health care decisions. For so long as you can indicate to your health care providers what you want, nurses and doctors must listen to you. That’s why there’s no problem giving your attorney for personal care document to the person you’ve appointed as soon as it’s signed. It cannot be misused.
There’s been a lot of press recently about Canada’s new “physician-assisted death” (PAD) law. Depending upon your views on this highly controversial subject, you may have read about these legislated changes with either relief or horror. Not to worry. At present, your power of attorney for personal care document cannot constitute an “advance directive” for PAD. Nobody can or will “shuffle you out the door” or “pull the plug” prematurely.
However, you may instruct your power of attorney for personal care that you want “no heroic measures” to extend your life, and that you do want all medications administered to control suffering, even if doing so may shorten your life. That’s pretty general, but in reality no power of attorney document can anticipate every health care circumstance that may arise for you and what decisions you’d want in each such circumstance. That’s why it’s always best to have a full and frank discussion with the person you entrust to make personal health care decisions to make sure your attorney understands and will respect your values. Again, your attorney for personal care needs to make the decisions you would have made for yourself: not the decisions in accordance with the attorney’s own views and preferences.
Preparing your power of attorney for property and your power of attorney for personal care: these are key documents. Putting them in place while you have capacity can save your loved ones a lot of stress. Losing capacity suddenly – due to a stroke or a car accident, for example – can happen at any time in any person’s life. If you don’t have your power of attorney documents in place, it’s much more difficult to get urgent financial and health care decisions in place. You don’t want your kids compelled to commence a costly and slow court application for guardianship when they’re already worried about your situation. It’s never pleasant for any of us to confront the reality: we may outlive our mental capacity. But it’s a great kindness to the people you love most to put power of attorney documents in place, while you have the capacity to do so.
At Anderson Adams we prepare lots of power of attorney documents, but they are never just routine for us. We take the time to help you consider your options, answer your questions, decide what you want, and make sure the documents are properly witnessed and signed (executed). Big sigh of relief? Yes, that’s how you can expect to feel when you’ve got your power of attorney documents all done. You’ll deserve it!
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