Power of Attorney Basics
By PAIP Canada staff
When compared to past generations, the average person is living longer than ever. All things considered, this is a good thing, but it also brings up certain challenges.
As an example, when average life expectancy was no more than 35 years, we rarely had to worry about the impacts of cancer, and numerous other diseases. Today, approximately one in two people will get cancer in their lifetime.
To help manage these risks, a legal document called a Power of Attorney (POA for short) is often utilized. The way this document works (in all provinces except Quebec) is one person (the donor) gives decision making power to another person (the donee) to make decisions on their behalf.
POAs can be general or enduring and can cover all areas of one’s life, or certain specific areas.
Regarding the POA, a general POA is one that remains in effect (once granted) and ceases when the donor no longer has the mental capacity to revoke it. Essentially, once they can no longer enter into a contract for themselves, then the contract ceases. If this never happens to the donor, then the POA ceases when they pass away.
An enduring POA is a little different. It endures one’s mental depletion. Should the donor lose their decision-making abilities, then an enduring POA continues to remain in force and ceases only upon death.
Certain types of POAs deal with specific facets of one’s life. The most prevalent types of POAs are financial POAs and health care POAs. Financial POAs deal with one’s financial matters, whereas health care POAs allow the recipient of the POA to make decision on health-related matters of the donor.
To ensure one’s POA is executed properly, the best approach is to have an experienced attorney draft the contract and have it signed with at least one witness present (although some jurisdictions may require two witnesses).
In addition to POAs, drafting a will should also be considered. Wills are the document used to distribute one’s assets to beneficiaries following one’s death – a conversation for another day.
Remember: safety first, always look both ways before crossing.