What is a Power of Attorney?
A Power of Attorney is NOT a Will. A Will speaks for you from the moment you die. A Power of Attorney for Property speaks for you from the moment you become mentally incapacitated, whether it be from sudden accident or illness, or from the moment you ask someone else to act for you. This person is your "attorney" and does not have to be a lawyer. The authority which you give to your attorney can be general, so that your attorney can do anything on you behalf, or the authority can be restricted, so that your attorney can do only what you specifically delegate.
Do I Need A Power Of Attorney?
Yes. None of us likes to think about car accidents, Alzheimer's disease or heart attacks, but these things occur. If you become mentally incapacitated, and do not have a Power of Attorney, a relative or friend will have to apply to the Public Guardian and Trustee and seek permission to act for you, that is, to be appointed your "statutory guardian", a relative or friend will not be able to do your banking, or sell your house, or arrange mortgage financing, or do the myriad of other tasks because you are not competent and cannot sign your name. An application to be appointed your "statutory guardian" usually costs several thousand dollars. Your "statutory guardian may have to post a security bond and go through the costly process of filing a management plan on a regular basis and preparing annual financial statements. With a Power of Attorney, this extra cost and hassle are eliminated.
Whom Should I Appoint?
Very often, you will appoint the same person whom you have names as your executor. However, you can appoint someone else and you can appoint more than one person. You should also apooint a substitute. As with your Will, the attorney should be responsible, trustworthy, mature and have good business acumen. You may worry that the attorney might use the authority granted against your wishes. For example, children might feel that a parent is no longer mentally competent and the parent might totally disagree. If this is a concern, appoint two attorneys who must act jointly, or leave your executed Power of Attorney with your solicitor, and give him/her specific instrctions as to the circumstances under which it is to be released to your attorney. If you choose to do this, inform your solicitor. A Power of Attorney is not very effective if your attorney does not know it exists.
"Jointly" or "Jointly and Severally"?
If you appoint two people to act as your attorneys jointly, both of them must make all decisions together. If you appoint two people to act jointly and severally, they have the option to act together or separately. In this situation, you should specify that one attorney's decision will override the other attorney's decision if there is a dispute between them.
Guardians For Your Children
The Children's Law Reform Act allows you to appoint guardians for your children. While the appointment is valid for only ninety days, this eliminates any argument over who will care for you children immediately following your death. The court makes the final decision as to who the permanent guadians of your children will be, but the court usually places great faith in the wishes expressed in your Will.
Is My Attorney Paid?
You decide whether you wish your attorney to be compensated for the time spent acting on your behalf. The amound of payment is based on a scale set by government regulation and will be paid from your assets. It is reasonable to allow for compensation, even if your attorney should choose not to take any payment.
Should I Review An Old Power of Attorney?
Yes, and for two reasons. Firstly, is the attorney you appointed still capable of acting for you should the need arise? Secondly, if the document was prepared prior to 1984, it probably does not include the following clause: "In accordance with the Powers of Attorney Act, I declare that this Power of Attorney may be exercised during any subsequent legal incapacity on my part." If this clause is missing, the Power of Attorney is not vaild if you should become mentally incompetent.
Is My Bank Power of Attorney Sufficent?
No. It probably limits your attorney's authority to your holdings at the bank. You need a Power of Attorney which gives your attorney decision making authority over all of your assets.
How Do I Revoke a Power of Attorney?
Deliver a signed letter to your attorney, advising that you have revoked the document. Sign the letter before two witnesses. Advise all people who have dealt with your attorney regarding your affairs. Retrieve all originally executed copies of your Power of Attorney, if possible.
We are good.