This blog was written by Damian McGrath – Estate and Trust Consultant with Scotia Wealth Management

Choice is the act of decision making when faced with two or more possibilities.

Decision making requires an understanding of the situation, the decision itself and the consequences of it. If our ability to make those choices diminishes or is lost, then others need to make them for us.

A Power of Attorney gives another the legal right to make decisions and act for us. Without such a document it is a lengthy process to have an Attorney appointed – and gone is the ability to choose, not only who that Attorney should be, but what guidance is given to them.

There are two basic types of Attorney – Property and Personal. A Property Attorney is tasked with managing finances and property, keeping records and being financially accountable. A Personal Attorney will have to make important decisions such as accommodation, care and medical needs (many provinces require a separate Directive for medical decisions). The appointed Property and Personal Attorney(s) are often the same – but they do not have to be. Having an independent Property Attorney such as a Trust Company can hold a valuable role and offer additional safeguards.

An Attorney has a primary duty to act in the best interests of the donor. This can entail significant challenges and obligations and is potentially a long-term and time consuming commitment. It is emotionally difficult to make decisions for another and the point in time that an Attorney might need to step in is not always clear. Elderly clients often struggle with the concept of leaving their home even if their care needs would be best served elsewhere. Others might worry about family dynamics and strains on those relationships.

Planning goes beyond just the appointment of an Attorney. Advance consideration can be given to preferred levels of care or accommodation or when the Attorney should act. Thought might be given to who should make what decisions or how often accounts are to be produced and to who. Perhaps we want to allow the Attorney to follow a pattern of charitable gifting. It may be that contingency plans for an active business or ongoing support for loved ones are needed.

Considering the potential practical outcomes of incapacity and possible care needs can take us from ‘having a Power of Attorney’ to ‘Planning for Incapacity’.

These are difficult but essential conversations to have in advance. Planning for Incapacity deepens the understanding and allows us to make choices – while we still can.