A Power of Attorney is a legal document by which one person grants another the right to act on his/her behalf after the donor no longer has the capacity to make decisions. A Power of Attorney can be a useful estate planning tool, especially as we begin to age and become more concerned about our capacity to make decisions. It can take two main forms: 1. Financial – allowing someone to make key financial decisions for you (pay bills, sell property, etc) and/or 2. Personal Care – allowing someone to make health care decisions on your behalf (medications, treatments, residential care arrangements). In honour of November being National Alzheimer’s disease awareness month in the United States, here are some additional reasons why you may wish to consider signing a Power of Attorney:
1. Costs – It is far more cost effective to sign a Power of Attorney while you have the capacity to do so than for your family members to apply to a court to be appointed as guardians of your estate (similar to Power of Attorney) (hundreds of dollars versus thousands of dollars);
2. Time – It is quicker and easier to sign a Power of Attorney (one or two meetings with your counsel vs. many months of meetings and waiting for your family to apply to a court if you do not have a power of attorney );
3. Flexibility – A Power of Attorney can be as flexible or specific as you wish. It is often used for specific purposes over a specified period of time, such as allowing someone to sign property deeds in your absence if you have moved away or are away on vacation when your home sells.
4. Control– The Alberta Law Reform Institute notes that Enduring Powers of Attorney allow people to plan for their incapacity by choosing who they wish to make their decisions:
An EPA (Enduring Power of Attorney) enables people to plan for their own incapacity, giving them the freedom to choose someone whom they feel is most likely to act in their best interests. This sense of control over one’s life after incapacity promotes self-determination and autonomy, and enhances personal dignity. It also helps ease some of the anxiety which people feel knowing they soon lose the ability to manage their own affairs.
– Alberta Law Reform Institute, Enduring Powers of Attorney (Report for Discussion No 7, 1990) at 19-21, cited in Ann Soden, Advising the Older Client (Markham: Lexis Nexis Canada, 2005) at pages 112-113.
As always, you should consult your lawyer for specific questions regarding whether a Power of Attorney is right for you, as there are risks to choosing the wrong person to act as your POA (see my post on theft by enduring Powers of Attorney here.)