A ‘Power of Attorney’ (POA) is one component of Personal Planning and Estate Planning. The POA is a written document that authorizes another adult to act on your behalf for the purpose of dealing with private and business issues, as well as legal matters.
As the person granting authority, you are called the Principal, or Grantor / Donor of the Power. The person authorized to act on your behalf is called the Agent or Attorney-in-Fact, or ‘Attorney’ - for short.
Powers of Attorney have been used for thousands of years. Imagine a time when people could not travel rapidly, converse by telephone to confirm transactions, nor send ‘paperwork’ electronically. A document permitting your trusted Attorney to act on your behalf would have had tremendous utility.
Still today, individuals find themselves in situations where a Power of Attorney is extremely useful, but it is essential that you choose the POA that best suits your needs.
A Single Purpose Power of Attorney grants permission to your Attorney to deal with a single bank account, a single piece of real estate, or give instructions to a lawyer in a specific matter.
A General Power of Attorney gives power to your Attorney for all purposes, and allows the Attorney to deal with a wide scope of financial and legal matters, however; the authority ‘expires’ when the Donor loses mental capacity.
Unfortunately, it is upon the loss of mental capacity and when we can no longer participate in our own financial and legal matters, that our loved ones are most in need of a document that allows them to represent us in such matters.
The legislature of British Columbia passed statute giving Donor the ability to grant a power to their Attorney that would not expire upon the Donor becoming incapacitated: the Enduring Power of Attorney.
With an Enduring Power of Attorney, your Attorney will be able to make necessary financial and legal decisions for you in the event that you have become mentally incapable due to age, traumatic accident or extreme illness.
Remember that a valid POA document must specify whether the Attorney can exercise authority only when you are still mentally capable, or if the power comes into effect if you are incapable, or both. If you have real estate, it is important that you advise the Lawyer or Notary preparing your Power of Attorney, since the Land Title Act requires that the Donor’s appointment to be in writing and witnessed by a Lawyer or Notary.
While very useful, the authority of the Power of Attorney should not be underestimated, and careful consideration must be given to when it is appropriate and who will be named as the Attorney. It is important to note that while there is an expectation that the Attorney will act only in your best interest, with a Power of Attorney, the Attorney can also act against the wishes of the Donor.