Power of attorney

A power of attorney (POA) for finance (or property) is a legal document that you sign to give one person, or more than one person, the authority to manage your money and property on your behalf. In most of Canada, the person you appoint is called an "attorney" (in Quebec, a "mandatary"). That person does not need to be a lawyer. The names and requirements for the different types of powers of attorney that deal with finances and property will vary depending on the province or territory where you live.

A second major type is the enduring power of attorney for health and personal care, sometimes known as a living will. If you become incompetent to make decisions about where you live and your health care needs, someone needs to make those decisions for you.

Your attorney is legally obligated to always act in your best interest, not their own. To sign a power of attorney you must be considered mentally capable. A POA ceases to apply upon death, and instead your will comes into force.

Many Canadians have a power of attorney drawn up by a lawyer. In Quebec you can also use a notary.

Financial institutions may also have their own forms to appoint an attorney to make decisions about a specific account or property that you have with that institution. If you already have your own power of attorney that gives your attorney authority over all of your financial affairs, including accounts with that financial institution, it likely isn’t necessary for you to sign the bank’s form, but it may be more convenient.

Financial power of attorney
Generally, there are two main types of powers of attorney commonly used for finances and property in Canada: a general power of attorney; and an enduring or continuing power of attorney.

General power of attorney
A general power of attorney is a legal document that can give your attorney authority over all or some of your finances and property. It allows your attorney to manage your finances and property on your behalf only while you are mentally capable of managing your own affairs. It ends if you become mentally incapable of managing your own affairs.

A general power of attorney can be “specific” or “limited”, which can give authority to your attorney for a limited task (e.g. sell a house) or give them authority for a specific period of time. The power of attorney can start as soon as you sign it, or it can start on a specific date that you write in the document.

This type of POA is usually used in business or for short-term temporary reasons.

Each province and territory has its own laws relating to powers of attorney. You need to follow the law in the province or territory where you live.

Enduring or continuing power of attorney
An enduring or continuing power of attorney is a legal document that lets your attorney continue acting for you if you become mentally incapable of managing your finances and property. It can give your attorney authority over all or some of your finances and property.

An enduring or continuing power of attorney can take effect as soon as you sign it ; the intent is then to give a POA now, and for that to continue even after you become mentally incapable.

Alternatively, is possible to have an enduring POA only come into effect when you become mentally incapable, if this was specified in the document. In other words, you wish to continue to manage your financial affairs for now, but should you become incapable of doing so, there will be someone ready to step in. This is standard practice in estate planning. If you don't have an enduring POA in place to protect you in case of mental incapacity, you can't control who will take the financial decisions for you.

More advice
See the detailed Government of Canada website about financial POAs for ideas about:
 * Advantages and risks of POAs
 * Who can I ask to be my attorney?
 * What are my attorney’s legal responsibilities?
 * What to consider when choosing an attorney
 * What to consider before preparing a power of attorney
 * What to consider after you prepared a power of attorney

Power of attorney for health and personal care
If you become mentally incapable, you will want someone to manage your finances, but also someone to take decisions about health (including medical treatments) and other types of personal and non-financial decisions, such as housing (including moving into a long-term care home), safety, meals, hygiene and clothing.

In most provinces, naming your attorney (or "substitute decision-maker") for such non-financial decisions is typically done in a separate document, known by such names as living will, POA for health and personal care, personal or health directive, representation agreement, protection mandate, etc.

It is important to choose a trustworthy person for this role, often a family member or a close friend. This need not be the same person named in your financial POA. You can name substitutes in case that your first choice is not willing or able to act.

In addition to naming your attorney, you can also make your wishes known, for example by providing written instructions about certain medical treatments that you do not wish to receive. If you don't make your wishes known, then your attorney must make decisions based on what they believe to be in your best interest, by evaluating benefits and risks.

Your POA for health and personal care only comes into effect when you become mentally incapable. This can either be evaluated by your attorney alone, or confirmed by someone else, such as a medical professional or "capacity assessor".

Revising the documents
The general advice is to review your POA document(s) every five years, or if you experience a major life event (marriage, death of a spouse, death of your attorney, etc.).

If you change your province of residence, have a lawyer from the new province make sure your existing POA still works. If you have properties in multiple jurisdictions, and reside there regularly, you may need several POAs.

Storing the documents
If you have a lawyer or notary (in Quebec) draft your POA(s), they may hold on to the original paper documents.

If you own the original documents, store them in a safe place, such as a safety deposit box at the bank, or a small "fire- and flood-proof safe" at home.

It may be a good idea to tell your attorney where the original documents (or copies) are stored.

In Quebec
In Quebec, after a person becomes incapacitated, a protection mandate must be activated ("homologated") by a court, before the mandatary can use it. According to the non-profit organization Éducaloi, the mandatary will need "at least six months" to obtain at least 6 documents that are needed, and then "the homologation procedure itself usually takes three to six months". The procedure will cost at least $450 if the mandatary acts alone, but it is generally recommended to hire a lawyer or notary.

Record keeping
If you are acting as an attorney for someone who is mentally incapacitated, keep good written records of what you do. You could eventually "be called to account by such people as the public trustee, the executor of the person’s estate, or, if the grantor becomes mentally capable, the grantor himself or herself".