What is Power of Attorney?
Do you know what power of attorney is? In Ontario, this is a document that gives another individual the legal right to act on your behalf. This individual (the “attorney”) is appointed to make decisions on your behalf; those decisions may be financial (Power of Attorney for Property), relating to your own medical or personal care (Power of Attorney for Personal Care), or may be limited to dealing with very specific matters. In this article, we will only be discussing the Power of Attorney for Property. If you’re going out of the country, for example, you might want to appoint someone to be your attorney to look after things when you are away.
Understanding Power of Attorney
A Power of Attorney is a legal document that is signed by you that gives one person or more than one person the legal authority to manage your property on your behalf. The person that you appoint is called the “attorney”, but that person does not have to be a lawyer; it can be anyone that you trust to manage your financial affairs. Your “property” consists of anything you might own or have an interest in, such as bank accounts; it is not limited to what we call “real property” (such as your house or condo). The attorney will also have the ability to deal you’re your creditors.
To be able to appoint someone as your attorney, you must be mentally capable when you sign the Power of Attorney. Mentally capable means that you have a general understanding of your property (both the type of property and the approximate value), and that you understand the legal power that you are giving (that the attorney will have the ability to do anything that you could do). There is no one definitive test for capacity and capacity, or lack of capacity, can come and go. Furthermore, you may be “capable” when it comes to making the Power of Attorney, even if you are not capable of managing your own financial affairs. The rules surrounding capacity can be complex and will vary for each province. It is important that you have someone who knows the rules for the province in which you live when you give a Power of Attorney.
General Power of Attorney
When we talk about a general power of attorney, we are referring to a legal document that gives someone the legal authority to deal with your property and finances, in the same way that you can. They are managing your affairs while you are still mentally capable. This right ends in the vent that you become incapable of managing your own affairs. A general power of attorney can also be limited and/or it can be specific, such as only giving the attorney the ability to carry out a specific task, such as selling a home, or limiting the time period in which the attorney can act to a set period, such as the period you are out of the country.
Continuing Power of Attorney Or Enduring Power Of Attorney
A continuing Power of Attorney allows your attorney to continue acting for you if you become incapable of managing your property/finances. As with a general power of attorney, you can limit your attorney’s authority if you want, such as over certain property, or you can give your attorney authority to manage all of your finances and property. A continuing Power of Attorney usually takes effect the moment that you sign it; however, you may wish to limit it so that it only comes into effect in the event that you become mentally incapable of handling your own affairs. A Power of Attorney that is only supposed to come into effect in the event that you become mentally incapable of handling your own affairs has to specifically say so in the actual Power of Attorney.
What Can an Attorney Do?
In short, the attorney can do anything that you can do, save and except make a will, unless you have included limitations in the power of attorney document. The power of attorney can sell real estate, sign cheques, do your daily banking and so on. Your attorney will not be the owner of your property or your money; but they have the legal right to manage your property or money on your behalf. The power of attorney does not give the attorney the ability to change your existing will, create a new will, or change any of your beneficiaries.
Summary
A Power of Attorney is simply a legal document that gives another individual the ability to manage your property and finances if you are not able to do so. This document does not give the person ownership over any of your property or your finances, but it allows them to manage your property, even if you cannot manage your property on your own.