Do You Need a Power of Attorney?
Courtesy of Dynamic Mutual Funds, Posted 03 Jul 2014
According to the Alzheimer's Society of Canada, over 450,000 Canadians over 65 are suffering from Alzheimer's or a similar condition that causes dementia and leads to mental incapacity. One third of Canadians know someone who has Alzheimer's. And, the situation is only going to get worse. It is expected that by the year 2031 over 750,000 Canadians will be suffering from Alzheimer's or a related disease.
Alzhiemer's is a difficult disease to fight. There are no known causes and it is not known how to stop its progression, the Alzheimer's Society says. If you (or your parents) are starting to show signs of disorientation, memory loss, mood or personality changes or similar symptoms visit your doctor. But, it may also be time to put some protections in place to ensure your finances and property continues to be managed properly.
One of the common protections available is a Continuing Power of Attorney for Property. This is a legal document where a person gives someone else the legal authority to make decisions about their finances if they become unable to make those decisions themselves. It is important to know that having a Power of Attorney does not stop you from looking after your own affairs while you are capable. You can stipulate that the POA doesn't come into effect until a certain date or until your doctor provides a letter stating that you are mentally incapable of making decisions.
One of the biggest decisions to be made when considering a Continuing Power of Attorney for Property is who should be the new decision-maker. An Attorney could be granted a great deal of power. For example, if a father names his son to be the Power of Attorney, the son could pay bills, manage investments and real estate, sign documents for the father and even sell his home. Assigned powers can be limited. For example, you could provide your Attorney with full decision-making authority with respect to your bank accounts and investments, but prohibit him from making decisions about your real estate.
Anyone over 18 can be named an Attorney. If you appoint more than one Attorney, they have to make decisions together unless you specifically give them permission to act separately. If you name two people Attorneys there could be the potential for disagreements between them on what to do with your property. If you name your two children, your affairs could be the cause of friction in their relationship. To avoid disagreements between siblings, you could also name a Trust Company which would act as your Attorney for a fee. Any Attorney named is entitled to a payment based on a government-mandated formula, but you can prohibit payments in your Power of Attorney document.
There are many serious issues to be considered when granting a Continuing Power of Attorney for Property. Your financial advisor will be able to help you make decisions that are right for your situation. And, while it's not necessary to consult with a lawyer, doing so will ensure the document is designed to work in your best interests.