Powers of attorney: Property and person

kiran-gill

Kiran Gill

Although most individuals understand the importance of having a will, the importance of having a Power of Attorney for Property and a Power of Attorney for Personal Care is often overlooked.

A Power of Attorney is a legal document that gives another individual the right to act on one’s behalf during the grantor’s lifetime. There are two types of Power of Attorney: Continuing Power of Attorney for Property: applies to one’s financial affairs and allows the person named as the attorney for property to act for the grantor even in the event of mental incapacity.

Power of Attorney for Personal Care: applies to one’s personal care decisions such as health care or housing.

Why Appoint a Power of Attorney?

A will deals with the administration of one’s affairs only after death. A will does not assist in dealing with the administration of one’s affairs during one’s lifetime and there may be circumstances where it may be important or useful to have another person authorized to manage one’s financial affairs. For example:
• If you are away from your home on vacation or business at a critical time, you might wish to appoint someone as your attorney to sell your home.

• In the event of medical disability, you may be unable to manage your own affairs.

• Diminished mental capacity that is associated with old age may lessen your ability to manage your own affairs.

Appointing a Power of Attorney for Property can solve these issues. Ontario law permits you to appoint an attorney for property with broad powers to do anything that you can lawfully do yourself.

Authority of an Attorney for Property

In selecting an attorney for property, it is important that you select someone whom can trust. Unless you specifically restrict your attorney’s powers, he or she may be able to do almost anything that you can do concerning your financial affairs. For example, an attorney for property may sign documents on your behalf, start or defend a lawsuit, sell or purchase property, or make investments.

Your attorney cannot however make a will or grant a new power of attorney on your behalf. Legal responsibilities of an Attorney for Property

The legal responsibilities of an attorney for property are numerous. The legal responsibilities include the obligation to act in the interests of the incapable person for his or her benefit. The attorney must maintain the financial records and accounts of the incapable person separate from his or her own property. An attorney for property is held to strict accounting requirements and must keep detailed records of their management of the grantor’s property.

Acting as an attorney for property is a highly involved responsibility and attorneys are subject to high standards at law. As such, you would not wish to appoint as an attorney anyone other than a person of the highest integrity and in whom you have absolute faith.
The quality is often more important than appointing someone who has experience in investment, legal, real estate, or business matters since you attorney for property can retain persons to provide that type of advice if necessary.

In the absence of a Power of Attorney for Property, the only way in which your affairs can be administered if you become legally incapable is through the appointment by a court of a person who is called a “Guardian of Property.” The court fees in obtaining such an appointment are often considerable.

Why Appoint a Power of Attorney for Personal Care

A Power of Attorney for Personal Care is a document that contains one’s wishes regarding his or her own personal care, such as decisions about health care, nutrition, clothing, housing hygiene and safety. In a Power of Attorney for Personal Care, you may name someone to make these decisions on your behalf if you become unable to do so. You may authorize your attorney for personal care to give or refuse consent to treatment under the Health Care Consent Act and you may direct the attorney for personal care to give or refuse consent to specific kinds of treatment.

The Power of Attorney for Personal Care can only be exercised when and if you become incapable of making personal care decisions yourself.

If you wish to ensure that a particular person has the authority to make personal care decisions for you, or if you wish to very specific about the decisions which are made on your behalf, you should definitely have a Power of Attorney for Personal Care.

Authority of an Attorney for Personal Care

If a person appoints an attorney for personal care and does not include an advance directive, the attorney for personal care must act in the best interests of the incapable person.

The Health Care Consent Act provides guidance in determining an incapable person’s best interests and includes consideration of objective medical factors as well as the incapable person’s values and beliefs.

It becomes challenging for an attorney for personal care, where the incapable person did not express his or her wishes while capable.

For example, the attorney for personal care may have hope for the recovery of the person but the medical practitioner may not believe that the treatment plan is realistic in the circumstances. We therefore, encourage our clients to discuss and document their wishes and treatment plan with the proposed attorney for personal care, select an attorney for personal care who understands their wishes, values, and beliefs and who has the strength and maturity to advocate on their behalf.

Kiran Gill is an estate and trust planner and litigator at Brampton, Ont.,-based Lawrences law firm.

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