Deciding who you might wish to hold power of attorney in the event that you are no longer capable of managing your own affairs is a vital and oft-overlooked element of estate planning. It is a document that you put together while you are still in command of your own faculties.
This incapacitation can come from any source, including injury, illness, or the natural ravages of the aging process.
Without this document, family members or friends might have to petition the court to become a trustee instead. This process can be both costly and time consuming. It can also mean that someone can take control of your affairs whether you wish them to or not.
What is a General Power of Attorney in Alberta?
A General Power of Attorney gives a chosen representative the ability to make certain decisions on your behalf. It must be signed, dated, and witnessed. It must name an Agent who will look over specific affairs named in the document. Usually, the Power of Attorney gives the Agent the ability to handle financial affairs.
The difference between a General Power of Attorney and an Enduring Power of Attorney is that this Power of Attorney expires if you can’t make financial decisions for yourself anymore. A General Power of Attorney might, for example, let a financial manager execute financial matters for you while you are still alive, well, and capable of handling those matters for yourself. This could include paying your bills, investing your money, selling your home, administering rental property, and more. Many wealthy people allow financial managers to conduct these matters on their behalf because they have greater skill at doing so, and because it frees them to pursue other interests.
Some people also use a General Power of attorney when they’re injured or recovering from an illness.
An Enduring Power of Attorney would allow that same person to handle your affairs even if you lose the mental capacity to do so.
When does an Enduring Power of Attorney take effect?
An Enduring Power of Attorney can take effect in one of three ways.
First, it can take effect on the date that it’s signed. It can also be written up to go into effect on a specific date.
Most are written to go into effect when a specific event occurs, namely that the Donor, the person giving the power of the attorney, has become mentally incapacitated in some way. The Power of Attorney must also state that someone must make a written declaration that this capacity has been lost, and names the person who can make that determination.
An Enduring Power of Attorney may be revoked but only if you have the capability to revoke it. The courts may also revoke it by canceling it or granting a trusteeship order to someone else. If the person with the power of attorney dies or becomes incapacitated it also ends, and the court must then appoint a trustee to take that person’s place.
The court may force the person acting under the enduring power of attorney to provide copies of financial records to the court for review in the event that questions arise.
Does a General Power of Attorney create the power to make medical decisions?
No. For that you’ll need a Personal Directive. These medical decisions include:
- Health instructions you want followed.
- Who will have the ability to agree to, refuse, or withdraw consent for any kind of medical care, treatment, surgical procedures, tests, or medications.
- Who will have access to your medical records.
- Who can provide authorization to discharge you from a hospital.
- Who can hire and fire medical personnel on your behalf.
- Who can agree to the prescription of medication, or an end to a prescription.
Without a Personal Directive the health care provider may simply choose the nearest relative if you are deemed to be incapable of providing informed consent. That person may not know how you would prefer to have your health care handled.
The Personal Directive cannot authorize a health care provider to take actions that are illegal in Canada, like Euthanasia.
What are the four types of Power of Attorney?
We’ve already discussed General Power of Attorney and Enduring Power of Attorney.
There’s also a type of Power of Attorney known as the Special Power of Attorney. This gives the Agent the ability to do one specific thing. You might grant this to a property manager who is renting out a property on your behalf, for example.
Finally there’s Durable Power of Attorney, which is similar to an Enduring Power of Attorney. This type of Power of Attorney may only take effect when the Donor has become incapacitated.
Can siblings share power of attorney?
Yes. These are called “joint” or “joint and several” attorneys.
This can create problems. Joint attorneys must agree and must act together. If they can’t agree your affairs may grind to a standstill because they won’t be able to manage them.
In this instance usually the dispute will end up in court and the court will end up appointing a new trustee anyway.
While it can feel awkward to choose between siblings, there are ways to make the choice. For example, you can decide which of the two siblings is routinely more responsible. You can ask yourself which of the siblings already has a lot on their plate, and which has more capacity to make the decision.
Keep in mind that a Power of Attorney will not grant any sibling the right to keep the other siblings from their parent.
How much does someone with Power of Attorney get paid in Alberta?
Someone who is acting under the Power of Attorney may charge for the service of handling assets. Some Power of Attorney documents lay out a schedule of compensation.
A small monthly fee or honorarium is often considered reasonable, but will rarely exceed more than a few hundred dollars.
Get help with your Power of Attorney documents today.
It is wise to get help from an attorney when drawing up Power of Attorney documents. These legally binding documents can have enduring impacts on your affairs and your estate well into the future.
Our experienced, compassionate estate planning attorneys are standing by to help. Our wills and estates attorneys have decades of experience handling very complex estates, and we’re happy to help. Call (780) 474-7777 to schedule an appointment.