How to Make a Power of Attorney in Alberta

A power of attorney is an important estate planning document for many Albertans and, unlike a will, it can help protect you and your finances while you’re still alive.

If you face an emergency that leaves you unable to make important financial decisions, a power of attorney authorizes an individual (or individuals) to legally make decisions on your behalf.

But there are different types of power of attorney and, to be valid in Alberta, you must follow a set of guidelines when creating one.

Here’s what you need to know.

A general power of attorney allows a nominated person to look after your financial affairs while you’re still alive. It must be in writing, signed, dated and witnessed to be legally valid and only applies when you’re alive.

The document authorizes power only over financial decisions — not healthcare or other personal decisions. For that, you need a personal directive (sometimes called a “living will”).

You may create more than one power of attorney, and they can be active at the same time but this can create complications if one contradicts the other.

General and enduring powers of attorney authorize different powers in financial decision-making. The main differences are as follows:

Mental capacity is considered the ability to understand information that is relevant to making decisions and to see the reasonably foreseeable consequences of those decisions.

A power of attorney is an appropriate document for almost anyone who must make financial decisions.

While many people don’t start thinking about enduring powers of attorney until later in life, this can be a mistake. Victims of serious accidents, for instance, often lose the capacity to make financial decisions.

Before creating your document, consider the following:

• Do you need to authorize someone to make decisions for you only temporarily or to cover you if you lose mental capacity?
• Do you need to authorize decision-making for only one financial transaction (such as a property deal while you’re overseas) or are broader powers required?
• Could a joint bank account with the proposed individual solve your issue? Or do you need the power of attorney to cover more than simply bank transactions?
• When do you need your power of attorney to become active?
• When do you need your power of attorney to end?
• If you lose mental capacity, what measures need to be put in place?
• Which individual can act as power of attorney for you?
• Is this individual willing and able to act if required?
• How will you prepare your power of attorney?

Because of the high stakes involved in creating power of attorney documents, most people choose to work with a qualified estate planning lawyer.

The three main elements to consider when making your power of attorney are:

1. How to select and appoint your attorney
2. What powers to assign to the role
3. How it comes into effect and ends

Let’s take a closer look at each element.

You decide on the powers that your attorney has (as covered above). However, certain actions are prohibited for attorneys under Alberta law, including:

• Making or changing a will for you
• Changing or drafting a new Power of Attorney for you
• Changing or drafting a new Personal Directive for you
• Changing your designated beneficiaries on your RRSPs, pension benefits or life insurance policies
• Making decisions about your healthcare or personal life outside your finances

A power of attorney can be changed or revoked (cancelled) at any time providing you retain the mental capacity to do so.

Amendments must be in writing and your attorney should be informed of them beforehand.

You can end your power of attorney by cancelling it in writing. If you lose mental capacity, a general power of attorney ends. All powers of attorney end after you die.

If you haven’t yet engaged an estate planning lawyer to create your power of attorney, you may need to do so to make it legally valid in Alberta.

You should at least have a lawyer review the document before it is signed and witnessed to ensure that you are not missing something important.

Once created, keep your original document in a safe and secure place and file a copy with your attorney(s) and your lawyer. It’s best to review it once a year to confirm that it still covers your main goals.

If you’re considering drafting a power of attorney, speak to one of our experienced estate planning lawyers at Vest Estate Lawyers in Calgary for an initial consultation about your needs.