Powers of Attorney 101

DLG Wills & Estates

Considering the COVID-19 outbreak in BC, it is important to be prepared to legally deal with all the possible consequences of contracting this illness. This blog post will introduce you to the power of attorney; a legal tool you may use in situations where you might want or need another individual to make important financial and legal decisions on your behalf. For example, if an illness such as COVID-19 or an injury makes it difficult for you to handle your financial or legal affairs, such as paying your bills or banking, this legal instrument can help you.

What is a power of attorney?

Power of attorney is a legal document you can use to appoint a person of your choosing to make financial and legal decisions on your behalf. This person is called your “attorney”. You must be at least 19 years old and mentally capable to be able to appoint an attorney.

A power of attorney can be general or enduring. A general power of attorney comes to an end when you become mentally incapable. However, an enduring power of attorney continues even if you become mentally incapable. Importantly, both the general and enduring power of attorney come to an end when you die. If you choose to have an enduring power of attorney, your agreement must specify whether that the power of attorney is in effect while you are capable as well as in the event of your incapacity, or whether it only comes into effect upon the occurrence of a specified event of incapacity.

The breadth of your attorney’s powers and authority depends on you and your needs. You can limit or expand the scope of the power of your attorney by using various clauses in the document that clarify what your attorney can and cannot do. For example, you can give your adult children a limited power of attorney and allow them to only deal with your banking matters, or you can grant them a general authority to make decisions in relation to all your financial affairs. When making decisions on your behalf, your attorney must act in your best interest while taking your wishes into consideration.

Who can be your attorney?

Your attorney should be someone you trust. Your attorney will be able to make important life decisions on your behalf and as such you need to have trust in their judgment. The person you choose as your attorney must accept the position, be at least 19 years old, and mentally competent. Mental competency is defined as understanding the purpose and possible outcomes of the power of attorney agreement at the time of signing.

You can name more than one person to be your attorney. If you choose to have more than one attorney, you need to clarify in your power of attorney document whether you want them to make decisions together or they are permitted to act independently. Additionally, you can name one or more alternate attorneys who may take over if your first attorney becomes unable or unwilling to act.

You can revoke the power of attorney with a written notice or by including an end date or a precipitating event in the power of attorney agreement. To be able to revoke the power of attorney you must be mentally capable and understand the nature and consequences of your revocation.

Are there any signing and witnessing requirements for a power of attorney to take affect?

You must sign the power of attorney agreement in front of one witness if they are a BC lawyer or notary public. Otherwise you need two adult witnesses to sign the document in front of you and each other. Your chosen attorney must also sign the agreement in front of one adult witness if they are a BC lawyer or a BC notary public. Otherwise your attorney needs two adult witnesses as well. Please keep in mind that if your power of attorney agreement is granting your attorney real estate related powers (i.e. buying and selling property on your behalf), signing of the power of attorney must be witnessed by a lawyer or a notary.

The following individuals cannot act as a witness to the signing of an enduring power of attorney:

  • a person named in the enduring power of attorney as an attorney;
  • a spouse, child or parent of a person named in the enduring power of attorney as an attorney;
  • an employee or agent of a person named in the enduring power of attorney as an attorney;
  • a person who is not an adult;
  • a person who does not understand the language used in the power of attorney document.

Does your attorney have any statutory duties and obligations towards you?

Section 19 of the Power of the Attorney Act [RSBC 1996] CHAPTER 370, sets out the duties of an attorney under an enduring power of attorney agreement. These duties include the following:

  • duty to act honestly and in good faith;
  • exercise the care, diligence and skill of a reasonably prudent person;
  • act within the authority given in the power of attorney;
  • keep records for inspection and copying;
  • act in your best interest, while taking into account your wishes, known beliefs and values, and any directions to the attorney set out in the power of attorney;
  • give priority when managing your financial affairs to meet your personal care and health care needs;
  • invest your property only under the Trustee Act, unless otherwise stated;
  • foster your independence and encourage your involvement in any decision making that affects your affairs;
  • not dispose of any property that the attorney knows is specifically gifted in your will, unless it is necessary to comply with their duties; and
  • keep your assets separate from their own assets.

If you think you need a power of attorney, we are here to help you. Our lawyers have the knowledge and skill necessary to draft a power of attorney that meets your needs.

Disclaimer

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