How would loved ones’ access funds and make financial decisions on your behalf if you suffered a serious accident or illness and could not look after your own financial or business affairs?
This question is hard to consider, but vital once you start to create an estate plan.
Nobody likes to think about a time when they are incapacitated, but people are living longer in Alberta, and it is a reality that many have to face.
At Vest Estate Lawyers, our experts are ready to help you with the toughest of questions so that you can plan for later life and protect yourself and your loved ones’.
What is an enduring power of attorney in Alberta?
An enduring power of attorney is a legal agreement that authorizes a nominated individual (or individuals) to make decisions about your financial affairs if you are unable to do so.
Alberta’s Powers of Attorney Act includes legislation that covers these agreements.
The person(s) you select to act as “attorney” should be highly trustworthy and financially capable.
The agreement must:
- Be written while you have the capacity to make your own decisions
- State when the “attorney” has the authority to make decisions
- Specify if the authorization starts immediately or when you lose capacity (and continue)
What can an enduring power of attorney do?
The person nominated as your representative in an enduring power of attorney has the considerable responsibility of managing your financial affairs in your best interests.
As such, the attorney you appoint should be proficient in financial matters and extremely trustworthy. Some of their responsibilities may include:
- Managing all finances on your behalf
- Managing property
- Managing the financial affairs of your business
- Arranging to fund your healthcare and aged care needs
An enduring power of attorney does not remove your right to make your own financial decisions. It simply empowers someone to make decisions on your behalf if you should require this in the future.
Who should you appoint as an enduring power of attorney?
Your attorney under a power of attorney agreement can be anyone you trust. Generally, this is a close family member or friend but it could equally be a lawyer or other trusted professional.
Providing the individual is over the age of 18 with good mental capacity, he or she is eligible to act as an attorney but it helps if they have some understanding of your financial affairs.
Often, it is best to choose a local person for ease of access to funds. You may also want to consider the same person to act as your personal representative or “agent” in your personal directive. This is often a wise decision because your attorney for financial matters may need to liaise closely with the person in charge of your medical and personal affairs.
It is important to get the consent of the person you nominate as attorney because it is a serious responsibility that one must be comfortable to undertake.
An appointed attorney is mandated by law to act in this capacity and if that person is unwilling or unable to perform the role when the time comes (and no joint attorney has been appointed) the Court may need to intervene.
Always discuss your wishes and intentions regarding personal matters and financial/business matters with the nominated individual(s) before you draw up the necessary documents.
How do you create an enduring power of attorney?
Like with all legal documents for your estate plan, we will prepare your enduring power of attorney in writing with clear and unambiguous language to avoid legal challenges.
The documents must be signed and dated by you and one witness, who must sign it in your presence. The witness cannot be your spouse, agent or the spouse of your agent.
You should state clearly when you want the enduring power of attorney agreement to take effect It may take effect immediately or be triggered by a particular event, such as when a doctor certifies that you are unable to make business or financial decisions.
You may want your agreement to stay in effect once you are certified by a doctor that you are unable to make financial or business decisions, or it can be a temporary arrangement.
You may also want to request that your attorney provides reports to another trusted individual so that there is some oversight of your affairs.
Most people need the assistance of a lawyer to word an enduring power of attorney according to their wishes and to ensure that it is legally enforceable.
What are the different types of powers of attorney?
There are three main types of power of attorney recognized in Alberta:
- Enduring Power of Attorney (Springing): this must be signed while the donor has mental capacity but is not activated until he or she loses capacity, providing broad authority to look after the donor’s property and financial affairs.
- Immediate Power of Attorney (General): this provides the same broad powers but is activated as soon as it is signed and witnessed (often when the donor is elderly or a family member already assists them with their finances).
- Immediate Power of Attorney (Specific Purpose): this provides the immediate power to act on behalf of the donor in making a specific transaction, such as a property sale.
Remember, any type of Power of Attorney can be revoked provided that the donor has the mental capacity to do so.
What can happen if you have no power of attorney agreement?
Unfortunately, many families leave it too late to draft an enduring power of attorney. Either the loved one has already lost mental capacity through age-related illness or suffered an accident that renders them unable to sign legal documents.
In these cases, the family can face delays and frustration with the legal processes.
The bottom line is that no family member (whether a spouse, son, or daughter) can legally make financial or business decisions for you without an enduring power of attorney.
In the absence of this power, a family member must apply to the court for trusteeship under the Dependent Adult Act. This can be a time-consuming and costly process.
Create an enduring power of attorney in Edmonton
It is important to create a power of attorney that enables precisely what you need – and does not grant powers that exceed your intentions.
The team at Vest Estate Lawyers can help you design a comprehensive estate plan that includes an enduring power of attorney that reflects your wishes.
Start with a one-on-one consultation, during which we will listen to your goals and advise you of your options.