The Importance of Appointing a Power of Attorney
While most people understand the importance of having a will, not everyone thinks about a power of attorney, a document which is just as, if not more important, than a will. It is not pleasant to think about, but there may be a time when you are unexpectedly unable to manage your personal or financial affairs and will need someone else to do so. Planning ahead for times like this is important and can give you and your family peace of mind.
What is a power of attorney, and why might I need one?
A power of attorney document gives someone the legal right to act on your behalf should you become unable to do so.
Why might you want to appoint another person to handle your legal or financial affairs? Perhaps you’re planning on being out of the country for an extended period of time and need someone to manage your property or banking matters, or perhaps you want to plan for the unfortunate possibility that you may become ill and unable to make legal or financial decisions.
Are there different types of power of attorney?
The first common type of power of attorney is a Continuing Power of Attorney for Property. This is a legal document in which one person gives another the legal authority to make decisions about their finances. It is called a “continuing power” because it can be used after the person who gave it is no longer mentally capable of making financial decisions themselves. The types of responsibilities that would fall on a Power of Attorney for Property include paying bills and taxes as well as managing property and investments.
An important point to make is that the power of attorney does not authorize someone to give away property after the grantor’s death (which is why you still need a will).
The second common type of power of attorney is a Power of Attorney for Personal Care, in which one person gives another person the authority to make decisions about personal care on their behalf if they should become mentally incapable to do so themselves. The types of responsibilities that would fall on a Power of Attorney for Personal Care include decisions on how you would dress, where you would live, what you would eat, and what type of health care you would receive.
Who should I appoint as my power of attorney?
A power of attorney doesn’t actually have to be an attorney. People often choose family members or close friends – regardless of who you choose, it should be someone you trust completely and who you think is capable of handling the responsibilities given to them, as well as someone who you are confident will act in your best interest. The person you appoint as your attorney will have significant power over your property. You want to choose someone who you are confident will not misuse this power. Do not pick anyone whose motives you are unsure of, nor anyone who may be pressuring you to appoint them. It’s also important to talk to the person you are considering appointing in order to make sure they agree to assume the responsibility should it fall on them.
It is also possible to appoint more than one attorney. There are a number of ways two attorneys could be appointed. You may want to appoint a single power of attorney as well as a substitute, should the primary attorney become sick or unable to perform their duties. Alternatively, two attorneys could share or divide responsibilities. If you decide to appoint two attorneys to share responsibilities, the law will require them to make decisions together unless you specifically give them permission to act separately. When appointing joint attorneys it is important to specify how any disagreements between the attorneys will be resolved.
There is a valuable sense of security in planning or your financial and medical well-being before you are unable to do so. The lawyers at Arbesman Hamilton LLP are experienced in helping our clients prepare for their future and would be glad to speak to you about how we can help you. Contact us online or by phone at 416-481-5604 today to discuss any of your estate planning needs, including power of attorney.