The Difference Between Personal Directives and Power of Attorney in Estate Planning

The Difference Between Personal Directives and Power of Attorney in Estate Planning

Should you become incapacitated or unable to make your own decisions, there are two important legal documents to consider that can ensure your wishes are adhered to. In Alberta, a personal directive and a power of attorney serve specific purposes, and understanding the differences between them may help you plan for extenuating circumstances more thoroughly.

Our Edmonton estate lawyers may be able to help you understand these documents and their differences as they pertain to your estate. Contact us today to schedule a consultation.

How Are They Dissimilar?

An Enduring Power of Attorney (EPA) is a legal document that allows an individual (the “donor”) to designate another person (the “attorney" or “agent”) the authority to handle their financial and property affairs. An EPA comes into effect when the “donor” becomes incapacitated or incapable of handling their own financial matters. Some key points to consider are:

  • The primary purpose of an EPA is to handle financial and property matters including transactions, payments, banking, and more.
  • Only when the “donor” becomes incapacitated does an EPA come into effect. Until then, the donor maintains total control of their affairs.
  • So long as the donor is mentally able, they have the right to revoke or change an EPA at any time, allowing for flexibility in planning.

In comparison, a personal directive (PD) allows a trusted person (called a “proxy” or “agent”) to make decisions about personal and healthcare matters for a person who has become incapacitated. Some key points include:

  • A PD deals solely with personal and healthcare decisions such as medical treatments, living situations, and other personal factors. It does not grant the proxy power over any financial or property affairs.
  • A PD also only comes into effect when a person becomes unable to make their own decisions due to mental incapacity, which must be verified by a healthcare professional.

The Benefits of Using an EPA and PD Together

To establish the most comprehensive estate plan, you may want to consider how a personal directive and power of attorney can complement each other. When both are created, your financial and personal matters are addressed appropriately should you become incapacitated. It may be beneficial to designate attorneys, agents, and proxies separately. This ensures that appointed individuals focus solely on the areas that they are expected to manage.

Having both documents in place can also prevent the need for court intervention to determine guardianship or trusteeship should you become incapacitated. This can save time and money. Maintaining an EPA and PD builds a clear decision-making framework, easing the burden on family members during what may be a challenging and emotional time.

Contact Our Office Today to Schedule a Consultation

In Alberta, an EPA and PD can work in tandem to create a thorough plan in the event of a worst-case scenario. By doing so, you can ensure that your wishes are adhered to and that the particulars are taken care of properly. Having a comprehensive estate plan in place helps to safeguard the life you have built and the well-being of yourself and your loved ones.

It is important to consider the role of an estate lawyer and when you may need to hire one. An estate lawyer may be able to help you understand the differences between a PD and EPA and how the two can work together. Contact us at Verhaeghe Law Office today to schedule a consultation with our estate lawyers.

** Please note, this article is intended as a general overview on the subject of estate law, and is not intended to be legal advice. If you are seeking legal advice, please consult with an Alberta estate lawyer.

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