All About Estates

Do I really need a Power of Attorney?

Today’s blog was written by Courtney Lanthier, Law Clerk at Fasken LLP

Simply put, yes. A Power of Attorney, whether it be for your physical property or for your health care needs, can be an invaluable document that should be part of an estate plan. Clients can be so caught up in the need to have their Will completed in order to ensure their wishes are carried out after they’re gone –  but what about carrying our their wishes during their lifetime?

Generally speaking, there are two types of powers of attorney – property and personal care.

A Power of Attorney for Property can come in two different forms – a general power of attorney and a limited power of attorney. A General Power of Attorney for Property (“General POA”) allows the named attorneys to look after finances or other property when your client is no longer able to do so themselves. As many of us know, but still important to point out to clients, there are some limitations on what an attorney can actually do. Attorneys cannot create a new Will or change an existing Will, nor can they change any beneficiaries for insurance policies. They can, however, look after banking, such as signing cheques or making deposits, and buy and sell real estate. Since the attorney would have access to the client’s bank accounts and finances, a General POA is a relatively powerful document that, if not used properly, has the potential to cause some issues. We typically advise our clients that their General POA should be safely stored in our vault with their other estate documents (such as their Will and other POAs). Since a General POA typically becomes effective at the time of signing, it is best practice to ensure that it is only released to the attorney when it is needed to be used. A Limited Power of Attorney for Property (“Limited POA”) can provide authority to an attorney over specific assets, such as business interests, specific tasks, such as selling a certain piece of property, or can be valid for a set period of time. As with a General POA, the same suggestions would apply with respect to the safekeeping and release of a Limited POA.

A Power of Attorney for Personal Care (“Personal Care POA”) typically sets out the wishes of the client with respect to their personal care or health care needs, when they have been deemed incapable of making such decisions themselves. Understandably, some of the decisions for this type of document can be difficult for clients to consider, which is sometimes the cause of delay in their preparation. We should remind our clients that a Personal Care POA ensures their wishes are set out clearly and can therefore help to alleviate any confusion and misunderstanding in situations when they may not be able to speak for themselves. A Personal Care POA may articulate the client’s wishes to remain in their home for as long as possible and to maintain the lifestyle and standard of care that was previously enjoyed. Perhaps most importantly, a Personal Care POA will typically provide the attorneys with instructions on how to handle situations where the client may be in a life threatening physical state or suffering from mental incapacity with little to no chance of recovery.

It’s good practice to provide clients with an original Personal Care POA once it has been signed. Since this document only comes into effect on incapacity, it’s helpful for the client to have at least one original with their papers at home. Instances may arise where a client/attorney may need an original quickly in order to make a decision about health care needs, or on the weekend when most businesses are closed and access to the documents can be a challenge.

Whether it be at the beginning, middle or end of a client meeting, powers of attorney should always be a part of the discussion. This way, we can ensure our clients leave with a well-rounded estate plan that will provide them with that extra peace of mind moving forward.

About Fasken
As a premier law firm with over 950 lawyers worldwide, Fasken is where excellence meets expertise. We are dedicated to shaping the future our clients want, precisely when it matters most. For more information, visit fasken.com.

0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.