Why do I need a Power of Attorney?
A Power of Attorney is a legal document that grants a person of your choosing the power to make important legal and financial decisions on your behalf during your lifetime. As the person granting the power of attorney, you are called the Donor. The person you are granting the power of attorney to is called the Attorney.
Many people will have a Power of Attorney drawn up at the same time as they prepare their will. While a Power of Attorney becomes effective immediately upon signing the document and remains effective until it is revoked, you are still entitled to make your own decisions until you become unable to do so.
A Power of Attorney can be tailored specifically to meet your needs. There are two types:
- An Ordinary Power of Attorney, which limits the authority of your Attorney to act on your behalf only while you remain legally capable;
- An Enduring Power of Attorney, which clearly sets out the authority of your Attorney to continue to act on your behalf should you become incapacitated; and,
In addition, you may choose the extent of the authority that you grant to your Attorney. A general power of attorney gives full authority to your Attorney without placing any limits on what he or she can do on your behalf. In contrast, a specific power of attorney sets out exactly what your Attorney can do on your behalf. For example, you may want your Attorney’s authority to be limited to selling real estate that you own or to manage specific investments.
There are many reasons to have a Power of Attorney prepared. For example:
- If you become too ill to manage your affairs, your Attorney is able to take on this responsibility until you recover;
- If you are travelling, your Attorney is able to manage your affairs while you are away; and,
- If you have mobility issues, your Attorney is able to make deposits and withdrawals from your bank account on your behalf;
Preparing a Power of Attorney is a precaution worth taking to ensure that if something unexpected occurs, you have the comfort of knowing a person you trust is able to look after your legal and financial needs. If you do not have a Power of Attorney and you become mentally incompetent and unable to manage your affairs, this authority may be given to the Public Trustee by default. A relative or friend may make an application to the court to be appointed to take on this responsibility instead, however, this may not be the person you would have wanted to have this responsibility, and it generally amounts to an expensive and time consuming endeavor at that stage.
A Power of Attorney is an important legal document that must be worded carefully in order to ensure that it meets your needs. For more information on why you should prepare a Power of Attorney or how we can help with your Power of Attorney, please contact our Wills, Estates and Trusts Department.