Preparing a Power of Attorney

From Clicklaw Wikibooks
Jump to navigation Jump to search
This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Kevin Smith in March 2019.

A power of attorney is a legal document. It gives someone you trust the power to look after your legal and financial affairs. This might include paying bills, depositing or withdrawing money from your bank account, investing your money, or selling your home.

The person you give this power to is called the attorney. In this case “attorney” doesn’t mean “lawyer.” It simply means the person you’ve chosen to be your decision-maker.

Why you should consider a power of attorney[edit]

A power of attorney is a simple and inexpensive way to plan ahead. The power you give to your attorney can be limited to a single decision, or it can extend more broadly. There are differents types of powers of attorney.

With a general power of attorney, your attorney can manage your affairs while you are still mentally capable of managing your own affairs, but physically unable. This may be a good option if you have mobility issues or are ill. You can give your attorney broad powers to do almost anything with your finances and property.

If you prefer, you can restrict your attorney’s powers to a specific task or time period. This is called a limited power of attorney (also called a specific power of attorney). It’s often used by people who can’t manage their affairs because they’re injured or away travelling.

With an enduring power of attorney, you can plan in advance for any future incapacity. A family member, or someone else of your choice, is entrusted to manage your financial affairs if you can’t. Their authority to act for you can start right away, and then continue — or “endure” — after you are mentally incapable, whether due to illness or an accident or age-related decline. For more, see the section Enduring Power of Attorney.

A power of attorney can be set up so that it doesn’t become active until something triggers it. This is called a springing power of attorney. The triggering event might be that two physicians have declared you mentally incapable. At that point, your attorney can take over your affairs.

Both an enduring power of attorney and a springing power of attorney can be limited to a specific purpose or time period.

You can still make decisions[edit]

You needn’t worry that drawing up a power of attorney will immediately strip you of the ability to run your own life. Your attorney can’t override decisions you make while you’re mentally capable. And even if you become incapable, your attorney has a legal duty to encourage your involvement, as much as possible, in any decision-making that affects you.

You need to be “mentally capable” to sign a power of attorney[edit]

To make a decision for yourself or to take an action (like signing a document), the law says you must be “mentally capable.” Generally, this means you have to demonstrate you understand what you’re doing and the consequences of your actions.

It’s important to appreciate mental capability in the following two contexts:

  1. You must be mentally capable at the time you sign the power of attorney. You have to understand that you’re giving your attorney the power to deal with your financial and legal affairs. There is a specific six-part capacity test (see the section on Enduring Power of Attorney), and special rules for signing an enduring power of attorney.
  2. Mental capability also matters at the moment the power of attorney is used. For example, a general power of attorney can no longer be used when the person who prepared it can’t manage their own legal and financial affairs. But an enduring power of attorney can continue to be used even after someone is mentally incapable.

Choosing your attorney[edit]

Choosing your attorney is an important decision, and it’s not always easy. Your attorney will have significant powers and responsibilities.

Most people ask a family member or close friend to be their attorney. You can also ask a lawyer, a notary public, a private trust company, or the Public Guardian and Trustee.

Important things to consider when choosing an attorney include the following:

  • Trust. The most important thing is to choose someone you trust. Your attorney will have access to all of your money and property. You need to be confident they won’t misuse their power.
  • Ability. The law says the person you choose needs to understand the responsibilities involved. Think about how complex your finances are, and choose someone you know can deal with them.
  • Loyalty. Will the person you choose ensure your needs and wishes — not theirs — come first? Take the time to talk with your candidate about what you want and would expect of them. Make sure they’re comfortable making decisions for you.
  • Age and proximity. Your attorney must be at least 19 years old. They can be someone who lives outside the province, but that’s not always recommended. Think about what you’re asking your attorney to do. It’s often more convenient if they live close by.

There are two restrictions on who can be appointed attorney. You cannot appoint:

  1. a caregiver who is paid to provide you with personal or health care services, or
  2. an employee at a facility where you live if the facility provides personal or health care services.

These restrictions don’t apply if the person providing the care is your child, parent, or spouse.

You can pay your attorney[edit]

If you choose to pay your attorney, your power of attorney document must authorize the fee and set the rate.

Even if you don’t agree to pay them, your attorney is entitled to be paid back for any reasonable out-of-pocket expenses.

If a trust company or the Public Guardian and Trustee is your attorney, they’ll charge fees.

The attorney’s powers and responsibilities[edit]

When you create a power of attorney, you give someone the legal right to take care of financial and legal matters for you. This often includes paying bills and managing bank accounts. It can include bigger things like investing your money, insuring your car, or selling your assets.

With a general power of attorney, you can give your attorney broad powers to do anything with your property and money that you can’t do for yourself. Or you can restrict your attorney’s power with a limited power of attorney.

What you can do to prevent misuse of your power of attorney[edit]

There are things you can do to ensure your power of attorney isn’t abused. You can choose to:

  • Talk to a friend, family member, community advocate, or legal professional before preparing a power of attorney.
  • Name more than one person. Make sure the people you name will work well together to make decisions on your behalf.
  • Put limits on the power you give your attorney. You can require the attorney to keep records of your finances and show you those records regularly.
  • Appoint a monitor to oversee the activities of your attorney.
  • Give the power of attorney document to someone else you trust, and tell them when to give it to the attorney.
  • Insist that your attorney get legal advice about their responsibilities.
  • Learn about an attorney’s responsibilities. The attorney is like your agent. They must:
  • act honestly, in good faith, and in your best interests,
  • not take any personal benefit from your assets,
  • keep accurate records of any financial activities, and
  • keep your affairs separate from their own.

There are special requirements relating to real estate[edit]

If you own real estate, you may want your attorney to be able to sell it or otherwise handle it. Anyone who owns their own home should consider this. If you want your attorney to be able to deal with real estate, here are a few things you should know:

  1. You need to have a lawyer or a notary public prepare the document. You must sign the power of attorney in the presence of a lawyer or notary, and the lawyer or notary must also sign.
  2. Your power of attorney must use the exact name that’s listed on your property with the Land Title Office. For instance, if the name on the property deed is “Chung Hon Lee,” you can’t use “C.H. Lee” in the power of attorney. Do a search through the Land Title Office if you’re not sure what name you used.
  3. You must register the power of attorney at the Land Title Office and pay the registration fee. Check with the office to make sure your power of attorney meets the requirements as soon as you’ve prepared it.
  4. Your attorney can’t sell or transfer your property to themselves. If you want to include that power, it has to be specifically written in. Discuss this with your lawyer or notary.
  5. A power of attorney for real estate ends automatically in three years. This applies unless it’s an enduring power of attorney or you say in the power of attorney “Section 56 of the Land Title Act does not apply.”

Preparing the power of attorney[edit]

Most people go to a notary public or a lawyer to prepare their power of attorney. If you have a complicated or unusual situation, it’s best to get professional help. Phone around and compare prices. You should be able to get free quotes. See the Where to Get Help section for help finding a legal professional.

You must go to a notary public or lawyer if you want:

  • The power of attorney to be recognized at the Land Title Office (see above).
  • Your attorney to have the power to sell your vehicle or renew its insurance. In this case, your power of attorney will need to be notarized.

Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International LicencePower of Attorney © People's Law School is, except for the images, licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International Licence.