You can’t predict the future, but you can put a plan in place now so that you and your loved ones are prepared for whatever the future may bring. An enduring power of attorney is an important part of that plan.
What is a “power of attorney”?
A power of attorney (“POA”) is a legal document you use to give someone authority to make financial and legal decisions on your behalf. The person you appoint is called your attorney. A POA cannot be used to give a person authority to make health care or personal care decisions on your behalf—for that, you need a legal document called a “representation agreement.”
What is an “enduring power of attorney”?
There are two main types of powers of attorney:
- A general power of attorney, which automatically ends if you become mentally incapable of managing your finances and property; and
- An enduring power of attorney, which continues to be effective if you become mentally incapable of managing your finances and property.
An enduring power of attorney must specify that it is intended to continue or endure even if you lose capacity.
Why is it important to have an enduring power of attorney?
An enduring power of attorney is the only way for you to select the person (or people) who are authorized to take care of your finances and property should you become mentally incapable.
If you have a stroke, develop dementia, or otherwise become incapacitated, an attorney appointed by an enduring POA can pay your bills, handle your investments, and manage your property and assets for you.
If you become mentally incapable without an enduring POA in place, no one—not even your spouse—can simply step in and act on your behalf. The only way for your loved ones to secure the legal right to manage your financial affairs is by applying to the Supreme Court of British Columbia for committeeship, which is both expensive and time-consuming.
Why should I make an enduring power of attorney now?
You must be mentally capable at the time you sign any type of power of attorney. Illness can come on suddenly. Accidents and injuries are unexpected. Mental incapacity caused by aging or conditions such as Alzheimer’s can cause capacity to fluctuate over time. The best course of action is to make an enduring POA now while there is no question that you are capable of making decisions about your finances and fully understand the consequences of making or revoking an enduring power of attorney.
When will my enduring power of attorney come into effect? Enduring powers of attorney are typically effective as of the date of signing. An enduring POA will not prevent you from making decisions about your finances as long as you are mentally capable. It is possible to prepare a “springing” power of attorney that does not come into effect until a specific event occurs (e.g. a letter from a doctor that you have lost capacity). Springing clauses sound good in theory but can be problematic in reality—consult with an experienced power of attorney lawyer if you are considering including a triggering event in a POA.