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What Type of Power of Attorney Is Suitable For Me?
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What Type of Power of Attorney Is Suitable For Me?
A power of attorney is a powerful tool to ensure one’s financial and personal affairs are managed according to their wishes. It is a legal document that grants a person appointed as the ‘attorney’ the authority to act on behalf of another. The terms outlined in the document determine whether the attorney is given broad or limited authority.
Types of Power of Attorney in British Columbia, Canada
In British Columbia, the primary legislation governing this matter is the Power of Attorney Act, which provides a framework for the standard power of attorney and enduring power of attorney. In determining which power of attorney is more suitable for your situation, it is important to compare the features, legal requirements and considerations of the two types of power of attorney.
Standard Power of Attorney
This type of power of attorney allows a person (also known as ‘grantor’) to appoint an attorney to manage and do anything that the grantor can lawfully do on their behalf while they are still capable of managing their own affairs.1 The standard power of attorney is often used for convenience, such as when someone is out of the country or needs assistance with financial management.
A Standard Power of Attorney can be
- effective immediately upon signing or only upon the occurrence of a specific event clearly defined in the document;
- revoked at any time as long as the grantor has mental capacity; and
- terminated (when the grantor becomes incapacitated or grantor revokes it or upon the grantor’s death).
Enduring Power of Attorney
This is designed to continue to be effective even if the grantor becomes mentally incapacitated. The Enduring Power of Attorney ensures that someone can manage the grantor’s financial and personal affairs even if they are no longer capable of doing so themselves.2
An Enduring Power of Attorney can be
- effective immediately upon signing or only upon the occurrence of a specific event clearly defined in the document;
- revoked at any time as long as the grantor has mental capacity; and
- terminated only where the grantor revokes it or upon the grantor’s death.
Which Power of Attorney Is Suitable?
The first step is to identify the specific situation(s) for which you need an attorney. Are you looking to appoint an attorney because…
- convenience?
- you trust the attorney to make better decisions?
- your attorney has experience and expertise?
- you want to have a plan B if anything were to happen to you or your decision making ability?
- you will be out of town and unable to oversee certain matters?
Pair your reasons with the characteristics of the power of attorney.
The key feature that distinguishes the Enduring Power of Attorney from the Standard Power of Attorney is its continuity despite incapacity. Unlike a standard power of attorney, an enduring power of attorney remains in effect even if the grantor loses mental capacity. This feature makes it a crucial tool for long-term planning.
In contrast, the lack of continuity upon incapacity with Standard Power of Attorney makes it an effective tool for short-term matters. Some examples are as follows:
- If you are selling or purchasing a property and cannot be present, a Standard Power of Attorney can authorize your attorney to sign documents and finalize the transactions on your behalf.
- If you need help with paying bills, handling bank accounts or managing investments, a Standard Power of Attorney can be set up to give your attorney the authority to act.
- If you are travelling abroad and need someone to help manage your affairs and make decisions on your behalf.
Keep in mind…
If the person making the power of attorney cannot grasp the things listed3 below, they should not be making an enduring power of attorney.
- The property or assets they have and its approximate value.
- The obligations or responsibilities they owe to their dependents.
- The fact that their attorney will be able to do on their behalf anything pertaining to their financial affairs.
- Without the attorney managing their business and property prudently, its value may decline.
- The possibility of the attorney misusing the attorney’s authority.
- They can revoke the enduring power of attorney at any time as long as they are ‘capable’.
Understanding the nature and consequence of a proposed enduring power of attorney is important for a person to be deemed ‘capable’.4
Can I Draft My Own Power of Attorney?
Yes, but it is NOT advisable. For a power of attorney to be valid, the documents must meet all the legal requirements and formalities set out under the Power of Attorney Act.
We advise engaging a lawyer to draft your power of attorney as they have the legal expertise:
- to understand the intricacies of the law and reduce the risk of errors.
- to tailor the provisions of the power of attorney to your specific needs and circumstances.
- to navigate the complexities of your financial matters, business interests, or family dynamics and provide guidance that a generic template may not cover.
- to advise you on how to revoke a pre-existing power of attorney and help update it as your circumstances change.
- to help prevent disputes among family members or other parties about your wishes, reducing potential conflicts down the road.
Pax Law can help you!
Our lawyers are willing, ready, and able to assist you. Please visit our booking page to make an appointment with one of our lawyers or consultants; alternatively, you can call our offices at +1-604-767-9529.
The information presented is for informational and educational purposes only and may not be accurate. This information does not replace getting legal advice from a qualified, practicing lawyer. If you are facing a legal dilemma, you should make an appointment and consult with one of our licensed and practicing lawyers.
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