A Power of What?
A Power of Attorney is a valuable part of an estate plan. By using a Power of Attorney, you can control who will make decisions about financial and legal matters for you in case you lose capacity.
A Power of Attorney is a legal document used by an individual (the “donor”) to give authority to another person (the “attorney”) to make legal and financial decisions for the donor. The attorney is the agent of the donor under the document. As an agent, the attorney only has the authority specified in the Power of Attorney.
What are the different types of Power of Attorney (POA)?
There are three types of Power of Attorney:
- A General Power of Attorney: The Attorney can make decisions regarding the financial and legal affairs of the donor. (S/he can make all decisions the donor can make). However, the attorney cannot make decisions about personal affairs such as consenting to health care or deciding where the donor should reside.
- A Specific Power of Attorney: The Attorney has limited or specified powers for a specific purpose. For instance, the attorney could be authorized to sign cheques from a specific account to pay the usual household bills, or to approve and sign all documents related to the sale of a house and to deposit the proceeds in an account.
- An Enduring Power of Attorney: The Attorney can make decisions regarding the financial and legal affairs of the donor even if the donor becomes incapable due to mental capacity. Normally a Power of Attorney lapses or ceases to be effective if the donor loses mental capacity, but The Power of Attorney Act permits a donor to make an Enduring POA which will continue to be valid even in this case.
Who can make a Power of Attorney (POA)?
An adult person that has the required capacity can make a POA. The usual test to determine capacity to make a Power of Attorney requires the donor know the attorney can exercise all the powers the donor could during his lifetime, the donor appreciate the nature and extent of his property and financial affairs over which the attorney will be entitled to assume control, that the POA cannot be revoked if the donor becomes incapable, and that the attorney can deal with everything the donor owns and the legal affairs.
How Can a Power of Attorney be Revoked or Ended?
Any donor can revoke a Power of Attorney if the donor still has the mental capacity required to make a valid Power of Attorney. It is wise to do the revocation by written document. The notice will be used by the Attorney and every person that the Attorney may have to deal with. If land is involved, then a Notice of Revocation must be filed at the Land Titles Office.
Can you appoint more than one Attorney?
Yes! If you appoint more than one Attorney, they can be appointed to act together or individually. You could also appoint an alternate attorney in case the first named attorney cannot act for certain reasons.
When does a Power of Attorney take effect?
A Power of Attorney takes effect on the day it signed by the donor. Conditions can be attached to the Power of Attorney to make it effective at a later date, upon the happening of a certain event or when certain specified circumstances exist.
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