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What is a Power of Attorney?

There are actually different types of powers of attorney. There is a power of attorney for personal property, financial assets and health care. Most simply, a power of attorney is a legal document that authorizes someone to make financial decisions for you, or make health care decisions if you become incapacitated.

A regular will, on the other hand, takes effect only after you have died and directs how your property will be distributed among your heirs. Both a power of attorney for property and health care directives take effect while your are still alive, but unable to make decisions for yourself.

A difficult subject

If you feel uncomfortable discussing wills and estate plans, you are not alone. A Trimark/Environics Research study in 1997, found that one-third of Canadians avoid discussing money matters with their families.

The discussion of death and estate planning is one of the most difficult subjects to approach. Yet, in order to have our wishes carried out, or the wishes of our parents, approaching the subject is well worth the effort. Sharing the information can also prevent costly last-minute legal and funeral bills, during a most stressful time.

What if you don't have a power of attorney?

In the absence of a power of attorney, if the worst should happen and you become incapacitated, no one would have the legal authority to handle your financial affairs. A provincial public trustee - an agent of the provincial government - would administer your affairs.

As well, in the case of irrecoverable physical or mental disability, you may be kept alive against your wishes, by artificial means or heroic medical measures.

Other important considerations

  • The rules regulating power of attorney vary from province to province. Ask your financial advisor or lawyer for more information.
  • A power of attorney is an inexpensive means of carrying out your wishes. The legal fees range from about $75.00 to $150.00.
  • It is both wise and convenient to sign a power of attorney at the same time as you prepare your will.
  • It is prudent to name alternates regarding a power of attorney. The person you've selected may not be able to carry out the responsibilities.
  • Your immediate family should know where to find anything associated with your estate in the event of your death or critical health emergency.
  • It is important to review your estate plan regularly. Your marital status may change, executors may die first, or the laws may change, all affecting your estate plans.

Further sources of information

  • Some provincial governments offer power of attorney information kits.
  • Banks and trust companies.
  • A trusted financial advisor or lawyer.