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Top questions about powers of attorney for personal care and property

An elder woman sitting on a couch reading a paper.

You may have heard of a power of attorney1 document, but if you’re not sure if you need one, here are answers to some fundamental questions about this topic.

The information below will help you understand what power of attorney documents are, why you should have them, and the decisions you’ll need to make when setting up your documents.

If you have more questions about powers of attorney and how they fit into estate planning and your overall financial plan, MD Private Trust Company can help.

What is a power of attorney?

A power of attorney is a legal document that appoints someone you trust to make decisions for you if you become unable to do so. This could be as a result of illness or an accident, or for any other reason. Power of attorney documents are typically created for you by a wills and estates lawyer (or notary in Quebec) as part of your estate plan.

There are two types of power of attorney documents:

  • A continuing (or enduring) power of attorney for property allows the person you appoint as your attorney to take care of your assets — to access your bank accounts, pay your bills and even sell your property.
  • A power of attorney for personal care allows someone to make medical decisions and other decisions about your personal care if you’re unable to do so — to decide what treatments you will have, where you live, what you eat and the type of caregiving you receive.

The concept of naming a substitute decision-maker is consistent all over Canada, but the terminology may be different depending on the jurisdiction in which you live.1 For example, in Quebec, the document is called a “protection mandate” and it appoints a “mandatary to property” or “mandatary to the person.”  (In Quebec, you can appoint a “power of attorney” to perform administrative tasks, but this document is valid only while you are fully competent.)

How do you set up a power of attorney?

When you’re creating your power of attorney documents, here are some of the decisions you’ll need to think through:

  • One or several? You can appoint more than one attorney for each area (property and personal care), in which case you can appoint them:
    • jointly (they must agree on every decision);
    • jointly and severally (any of the attorneys could act on their own, with full authority and without the other attorneys’ participation or agreement); or
    • by majority rule (if there are more than two attorneys appointed).
  • Full or restricted authority? You may want to limit the powers your attorneys can exercise. If you don’t put limits in place, your attorneys can do anything you can lawfully do, even while you are mentally capable. They cannot, however, change the distribution of your assets to beneficiaries upon your death through a will, registered plan or insurance policy designations, or other actions. If you don’t want to grant full authority to your attorneys, you could choose to limit the powers they can exercise — for example, allowing them to deal with assets only in a specific province, or to make decisions only about your medical practice.
  • General or continuing/enduring? A general power of attorney can be useful if you need someone to take care of your affairs for a limited time — for example, if you’re making an overseas trip. In contrast, a continuing/enduring power of attorney is the type used in estate planning, when you want to make sure your affairs are managed on your behalf if you become incapacitated.

When should you put power of attorney documents in place?

The idea behind these documents is to appoint one or more substitute decision-makers while you can communicate your wishes and while you’re mentally capable. If you’re considered incapable, you can no longer put power of attorney documents in place — right when they’re needed.

Because you could lose your decision-making capacity unexpectedly and at any time, executing these documents isn’t something you should put off. Once the documents have been executed, you’ll need to review them from time to time and make any changes that are necessary.

How should you choose your attorneys?

In deciding who to appoint as your attorneys, you should pick people you trust to handle your property and to carry out your healthcare wishes. It’s also important that you confirm that these people are willing to act in that role, should the need arise. (You’ll also need to check in with them periodically to confirm that they’re still willing and able to act.)

Suitable attorneys will be:

  • familiar with your situation and preferences;
  • experienced in making the kinds of decisions that may be required; and
  • available if and when needed (for example, you might want to select people who live close by, not in another province).

Getting advice from estate planning specialists can simplify these complex decisions. To learn more about MD Financial Management’s estate and trust offerings, contact an MD Advisor*.

1 In Canada, a power of attorney can be called a “continuing power of attorney,” “enduring power of attorney” or “protection mandate,” depending on the jurisdiction and the terms contained in the document. A power of attorney for personal care can be called a “representation agreement,” “personal directive,” “enduring power of attorney appointing a personal attorney,” “health care directive,” “advance health care directive” or “protection mandate,” depending on the jurisdiction.

* MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.

Estate and trust services are offered through MD Private Trust Company.

The above information should not be construed as offering specific financial, investment, foreign or domestic taxation, legal, accounting or similar professional advice, nor is it intended to replace the advice of independent tax, accounting or legal professionals.