As a trusts and estates lawyer, I am greatly concerned that fewer than 1 out of 3 Canadian adults have a Power of Attorney. For most, a Power of Attorney (POA) is something they don’t realize they need until it’s too late. This month, the Ontario Bar Association is raising awareness of this critical piece of estate planning.
Think of making a Power of Attorney as putting a contingency plan in place. You cannot assume that a will alone is sufficient to deal with your estate. Your will is only effective after you die. Consider how many people need help with managing their property or their personal care during their lifetime. Powers of attorney are your contingency plan in the event of critical illness or disability – a real likelihood given our aging population.
Powers of attorney permit a substitute decision-maker to exercise control over finances and health subject to the terms and restrictions you set out in the documents. You may never need these documents, but if you do experience serious illness or disability, wouldn’t you rather choose who will act for you?
There are two important kinds of Powers of Attorney in Ontario: (1) Continuing Powers of Attorney for Property, and (2) Powers of Attorney for Personal Care, which deal with medical and personal care matters. Wills and Powers of Attorney are complementary documents. Powers of Attorney are good as long as you are alive, but they die with you. At that point, your will (which has no force and effect until you die) takes over.
Property and Finances
If you do not have a POA, no one has the power to deal with your bank accounts or manage your money for you. Someone will have to go to court, in a process that may include having you assessed for capacity. This is not only expensive, but slow, and may generate bad feeling among family members. And the court’s choice may not be the person you would have chosen.
If you do not have a Personal Care POA, medical decisions can be made for you by your spouse or partner, or a child or parent, brother or sister. But no one can make other personal care decisions – such as where you will live – without a POA or a court order.
If you do not have powers of attorney, April is a good month to get them done! And even if you do have them, ask your friends and family whether they have made POAs. You do not want to have to make a court application because your parent neglected this very important part of their planning.