A power of attorney (POA) is a legal document that grants someone else the authority to make decisions for you regarding financial, property, or certain legal matters. Having a POA in place is an important part of any detailed estate plan.
At Verhaeghe Law, our experienced power of attorney lawyers in Edmonton can help you create a tailored power of attorney document that protects your interests and provides peace of mind for you and your loved ones. Contact our Edmonton office today to learn more about your legal options when it comes to power of attorney and estate planning.
What Is a Power of Attorney?
A power of attorney is a legal tool that allows an individual, called a “donor,” to designate somebody else, known as their “attorney,” to make decisions on their behalf. This can be useful in situations where you are unable to manage financial matters due to illness, injury, or absence.
Many people think that because they have a Last Will and Testament, they also have a Power of Attorney. However, these are separate legal documents.
A power of attorney is one of three important documents commonly prepared during the estate planning process, the other two being a personal directive and a Last Will and Testament. Each document serves a different purpose, and you may choose different individuals to act on your behalf under each one.
In Alberta, powers of attorney are governed by the Powers of Attorney Act. Understanding how these documents work can help you make informed decisions about your future.
Types of Power of Attorney in Alberta
There are different types of powers of attorney in Alberta, and the right document will depend on your circumstances and the authority you want to give another person.
Enduring Power of Attorney
An Enduring Power of Attorney (EPA) allows someone you trust to manage your financial and property matters if you lose the mental capacity to make those decisions yourself.
The primary purpose of an EPA is to handle financial and property matters, including transactions, payments, banking, and more. Depending on the authority provided in the document, these powers may also include managing investments, dealing with business interests, handling property transactions, and communicating with the Canada Revenue Agency.
An enduring power of attorney can take effect immediately and continue if you lose capacity, or it can be written to take effect when you lose capacity.
As long as you have the required mental capacity, you may revoke or change your EPA. This allows for flexibility in your estate planning.
General Power of Attorney
A General Power of Attorney gives your attorney authority over a broad range of financial and legal matters. However, unlike an enduring power of attorney, a general POA does not continue to be valid if you lose the mental capacity required to manage your affairs.
This type of power of attorney may be useful when you need someone to act on your behalf while you are still capable of making your own decisions, such as when you are travelling or temporarily unavailable.
Limited or Specific Power of Attorney
A Limited or Specific Power of Attorney allows you to give someone authority to handle particular matters or transactions rather than granting broad powers.
Limited POAs are often used for individual transactions. For example, you may be selling a property while out of town and need someone you trust to sign certain documents on your behalf.
People also use limited powers of attorney for business matters. Depending on the document, this may allow someone who knows your business to sign contracts, complete transactions, or handle other specific responsibilities.
Having a limited POA can come with many benefits, but it is important to clearly define the powers being granted and choose someone you trust.
At Verhaeghe Law, our wills and estates lawyers in Edmonton can help you understand the differences between these documents and determine which type may be appropriate for your circumstances.
Why You Need a Power of Attorney
Having a power of attorney can be an important part of your estate planning. Some key benefits of POAs include continuity, avoiding legal complications, and having greater control over who manages your financial affairs.
If you become unable to make financial decisions because of an injury or illness, an enduring power of attorney can allow someone you trust to step in and manage your affairs.
Without a valid enduring POA, your loved ones may have to go through a time-consuming and costly legal process to obtain the authority to act on your behalf.
A power of attorney is not only important for older adults. Unexpected illness or injury can affect individuals at any age.
A spouse does not automatically have the right to manage every financial matter for their partner. Similarly, parents do not automatically have the authority to sign documents for their adult children, and adult children do not automatically have the authority to manage their parents’ finances.
Planning ahead can help reduce uncertainty for your family if you become unable to manage your own affairs.
What Can a Power of Attorney Handle on Your Behalf?
The authority given to an attorney depends on the type of power of attorney and the terms of the document.
Depending on the powers granted, an attorney may be authorized to:
- Manage financial assets, bank accounts, investments, and pension-related matters.
- Manage physical assets such as vehicles, furniture, jewellery, artwork, and other property.
- Submit tax returns, pay bills, manage investments, and handle outstanding financial obligations.
- Hire professional services, including lawyers, accountants, and other advisors.
- Deal with business interests, financial transactions, and certain contractual matters.
- Manage real estate transactions and property-related expenses.
- Pay expenses arising from personal decisions made under a personal directive.
This list is not exhaustive. A power of attorney may grant broad authority or restrict the attorney to specific responsibilities. It is also important to understand that a power of attorney generally deals with financial and property matters, not personal healthcare decisions.
In Alberta, a personal directive is the document used to appoint someone to make personal decisions, including healthcare and living arrangements, if you lose the ability to make those decisions yourself.
Our Edmonton power of attorney lawyers can help ensure the authority granted in your document reflects your wishes and circumstances.
Things to Consider When Preparing a Power of Attorney
Preparing a power of attorney involves more than simply naming someone to act on your behalf. It is important to consider who you appoint, what powers they will have, and how the document will operate.
Choosing Someone You Trust
When selecting an attorney, make sure that you trust that person implicitly.
The person you choose should have your best interests as a priority when making decisions on your behalf. You may also want to consider whether they have experience managing financial affairs, property, or business interests.
Some questions to consider include whether the person is trustworthy, whether they live relatively close to you, whether they are capable of handling the responsibilities, and whether they are willing to act on your behalf.
We recommend speaking with the person before appointing them so they understand the responsibilities involved.
Appointing an Alternate Attorney
You should also consider appointing an alternate attorney in case your primary attorney dies, loses capacity, becomes unavailable, or refuses to act.
You may choose to appoint more than one attorney to act jointly. However, this arrangement should be carefully considered because disagreements between attorneys could delay important decisions.
An Edmonton wills and estates lawyer can help you understand the benefits and potential complications of different appointment arrangements.
Deciding When the Power of Attorney Takes Effect
An enduring power of attorney may take effect as soon as it is signed or when a specified event occurs, such as the loss of mental capacity.
If the document is intended to take effect when you lose capacity, it should clearly explain how that determination will be made.
According to the Government of Alberta’s guidance on enduring powers of attorney, if the document does not specify who must make the written declaration of incapacity, two medical practitioners must make that declaration.
Clearly setting out when an attorney’s authority begins can help avoid confusion and delays.
Preparing and Storing Your Documents
When preparing a power of attorney, it is important to ensure that the document meets Alberta’s legal requirements, including applicable signing and witnessing requirements.
You should also consider where the original document will be stored and how your attorney will access it when necessary.
Some people choose to keep important estate planning documents in a secure home safe or safety deposit box. Whatever storage method you choose, make sure the appropriate individuals know where the documents are located and can access them when needed.
Our Edmonton power of attorney lawyers can assist with preparing the documents and explaining the legal formalities involved.
What Happens If You Don’t Have a Power of Attorney?
If you become incapable of managing your financial affairs and do not have a valid enduring power of attorney in place, your family or loved ones may have to apply to the court for a trusteeship order.
Under Alberta’s Adult Guardianship and Trusteeship Act, a trustee may be appointed to make financial decisions for an adult who lacks capacity.
This process can be expensive, lengthy, and stressful. In addition, the court may appoint someone you personally would not have chosen to manage your financial affairs.
Having an enduring power of attorney in place can help avoid these potential complications by allowing you to choose who will manage your finances before you lose capacity.
An enduring power of attorney does not replace a personal directive or will. Each document has an important role in helping you and your loved ones prepare for the future.
Why Choose Verhaeghe Law For Assistance With Power of Attorney?
At Verhaeghe Law, we understand the importance of having a well-crafted power of attorney to protect your interests. Our Edmonton legal team has experience with estate planning and is committed to providing personalized legal solutions for you.
When you work with us, you can expect experienced lawyers who understand Alberta’s power of attorney laws and can help you prepare documents suited to your circumstances.
We take the time to understand your unique needs and offer personalized guidance. We also understand that planning for your future can be overwhelming, and our team is committed to providing compassionate service throughout the process.
Whether you are preparing your first power of attorney, reviewing an existing document, or considering changes to your estate plan, our lawyers can help you understand your options.
Are You Interested in Creating a Power of Attorney? Contact Our Power of Attorney Lawyers in Edmonton Today
If you’re ready to create or update a POA, you can speak with our team at Verhaeghe Law today.
Having a comprehensive estate plan in place, including a power of attorney, personal directive, and will, can help protect the life you have built and provide greater certainty for your loved ones.
Contact our lawyers at our Edmonton office online or over the phone at (587) 410-2500. With offices located in Edmonton, Athabasca, and Whitecourt, our team is ready to assist clients across Alberta.
Please note that the information in this article does not constitute legal advice. It is intended as a general overview of an area of wills and estates law. For legal advice, please consult with a lawyer.