Why Everyone Needs A Power of Attorney
Power of attorneys (POAs) are legal documents where you appoint a representative to act as your attorney (agent). There are many reasons you need a power of attorney. Most people are familiar with what is called an enduring power of attorney (EPA). An EPA appoints someone to make decisions on your behalf if and when you lose your mental or legal capacity. With an EPA, the person appointed in the document becomes your “attorney” because you are giving your decision-making power to them.
Many people are surprised to learn that an Enduring power of attorney is only one type of POA that can be created. There is also a specific POA and a general POA. While the EPA serves as a protection mechanism, the specific and general POAs are useful legal tools that can provide ease and convenience to various business transactions.
A specific (or special) POA allows someone to act on your behalf on a specific matter. Specific Power of Attorneys can also be used to complete a single transaction. For example, appointing someone as your attorney to sign for you on the purchase of a home because you will be away on business when the transaction takes place.
A general POA gives a very broad power to your appointed attorney. When you appoint someone under a general POA, you are giving that person the ability to do anything that you can legally do. General Power of Attorneys are useful when a person will be out of town for an extended period of time or are unavailable for some reason to sign documents on their own behalf.
The great thing about all Power of Attorneys is that they can be customized to your specific wishes and circumstances. You can choose who your attorney is, what their decision-making power applies to and when their decision-making power will come into effect. These are the Three W’s of a POA and they allow you to have total control over what happens if/when someone else has total control over your affairs.
We Help You Know Which Type Of Power Of Attorney Is Right For You!
Although there are different kinds of POAs, the Three W’s apply to each and every POA document. Each of our ten reasons for having a POA fit under at least one of the Three W’s.
POA: WHO You Give Power To
Here are the specifics you must think about when it comes to whom you give power of attorney to. we also make it clear which power of attorney work best for each aspect.
1) Choose Who Will Become Your Decision Maker – Enduring POA
The number one reason to have an EPA in place is so that you can choose who will become your decision-maker in the event that you are no longer able to make decisions for yourself. This is extremely important if you ever lose mental or legal capacity. If you lack capacity and don’t have an EPA in place, you won’t have control over who will become your attorney. Instead, the court will appoint someone to be your representative. This could be an anyone who applies to the court to be your representative. Or, if no one applies to the court, then a public guardian will be appointed for you. Thus, without an EPA in place there is a very real possibility that the person who will make decisions on your behalf will not be the person you want making those decisions.
2) Protect Your Family Members – Enduring POA
Typically, family members will apply to become your attorney if you have lost legal or mental capacity and don’t have an EPA in place. Their application to the Court can be time-consuming, complex and expensive. This is especially the case where more than one individual applies to become your representative. Family members can find themselves in a legal dispute with each other over who should be your representative.
Having Power of Attorneys in place saves family members from frustration, emotional hardship and being involved in a legal dispute.
3) Protect Your Assets – Enduring POA
An EPA can give broad or narrow powers to someone. If you lose mental or legal capacity and don’t have an EPA in place you will not have the option to customize the scope of power that your attorney is given. This is because you will have already lost the capacity to make decisions for yourself.
Not having an EPA in place means that different people, with different motives, can apply to the Court to make financial and legal decisions on your behalf. They will be in control of your assets. When you don’t have an EPA in place your assets are at risk of being handled in a way that you would not want them to be, should you ever lose capacity.
4) Peace of Mind – All POAs
The thought of giving your decision-making power to someone else seems scary and risky to most people. But, if a POA is executed properly there is no need to worry about risk. This is why it’s important to have a lawyer who is experienced with POAs assist you.
Your POA can be customized to limit the power given to your attorney. Power of Attorneys can also be customized with specific instructions on what you do and do not want done with your financial and legal matters. You can also include a clause requiring your attorney to provide accounting records to you when requested.
Alberta’s POA laws provide another layer of protection. The law imposes a duty on your attorney to only exercise their power in accordance with your best interests. The law in Alberta is designed to ensure that your attorney strictly complies with this duty.
For example, if a Court determines that your attorney is not acting in your best interest, the Court can terminate their powers as your attorney. The Court can also order your attorney to produce accounting records for all of the transactions they have done on your behalf. You can request the Court to order this (so long as you have mental capacity). If you do not have capacity then any interested person can request this from the Court.
WHAT: Your Power Of Attorney Can Do
Here are the various things that your power of attorney can do for you! We also note which Power of attorney best suits the purpose.
5) Convenience – All POAs
As discussed earlier, you can create a POA for a specific matter or a single transaction. This is a very convenient way for you to complete transactions when you’re unable to physically be present to sign documents.
For example, if you’re unable to travel to the place where a document needs to be signed, you can create a special POA so that someone else can sign on your behalf.
You can also create a POA for a specific matter. For example, if you’re a business owner and are going to be away for six months you can create a specific POA and have someone that you trust manage your business in your absence. This can ensure that there aren’t any disruptions to your business while you’re gone.
6) Protect Your Children’s Best Interests – Enduring POA
If you lose the capacity to make financial decisions for yourself, your attorney has the power to make those financial decisions for you. For example, if you want to contribute to your children’s post-secondary education you can specifically state this in your EPA and your attorney must comply with that instruction.
A POA can ensure that you’re able to financially provide for your children despite the fact that you no longer have the ability to control your finances.
7) Avoid Certain Medical Procedures or Medications – Enduring POA
An EPA can stipulate specific types of medical treatment that you do not want to receive. These stipulations can be made for any reason and must be followed, even if receiving the medical treatment is objectively in your best interest. This function of a POA gives people with religious or ethical objections to certain medical procedures the peace of mind that they will not undergo those procedures if/when they are unable to object to it themselves.
8) Control Your Finances – All POAs
An EPA can provide instructions about making donations to family, church and charity. You can declare that you do not want any donations made to charity. Or you can list specific charities and amounts to be donated to each charity. You can also provide instructions about gift giving to loved ones. For example, you can require your attorney to purchase a $40 birthday gift for your nephew each year.
The point is if you can imagine it you can likely customize your EPA to require your attorney to do it. This means that you can still be in control of your finances even if officially, your ability to manage your finances has been taken away.
With specific and general Power of Attorneys you can also provide specific instructions on how to manage your finances. For example, you can create a specific POA to manage your assets in a certain way. This provides you with the convenience of not having to manage your assets yourself, while still maintaining control over how they are managed.
WHEN The Power Is Given
Last we set out when Power of Attorneys start taking action.
9) Control When the POA Takes Effect – Enduring POAs
Power of Attorneys can take effect the moment its signed or it can take effect at some point down the road. This can be either at a specified time or on the occurrence of some future event. You have the freedom to choose when that specified time is or what that future event is. You can customize your EPA to require the written declaration of one or more persons (who you choose) to state that you have lost capacity. Their written declaration will activate your attorney’s powers.
10) When/If You Need It, It Will Be Too Late – Enduring POAs
Similar to a will, thinking about creating an EPA is an unpleasant thought for most people. This is because its planning for the unfortunate event that you are diagnosed with a mental illness, sustain a brain injury or lose your mental capacity in some other way. Once this happens, it’s too late to have any control over who becomes your decision-maker and what types of decisions they make.
It feels good to plan for the unexpected. Power of Attorneys give you piece of mind that if anything happens to you your financial and legal decisions will be in good hands. Make obtaining an EPA the next item on your list to check off and carry on knowing that your affairs will be controlled in the way you yourself would control them, should you ever lose the ability to make important decisions for yourself.
Getting Power of Attorneys: Easy & Affordable
Our lawyers in Calgary can help you understand the complexities of the different Power of Attorneys and can help draft one to fit your needs. Kahane Law Office would be pleased to assist you in all matters relating to Power of Attorneys. You can reach us toll-free at 1-877-225-8817, 403-225-8810 locally or email us directly here.