Estate Planning 101

Estate Planning 101 – Part 2

Enduring Power of Attorney

As mentioned in March’s Legal Ease article, another important legal document to consider when making personal planning decisions is an Enduring Power of Attorney.

An Enduring Power of Attorney is a document that allows you to choose a person to become your ‘attorney’ to make the necessary financial and legal decisions for you in case you become mentally incapable because of age, accident or illness.

Consider this scenario:

Margaret is walking to the corner store, when she slips and strikes her head on the pavement. Despite surgery, Margaret is left with an impaired ability to communicate and the doctors say she does not have the capacity to sign documents for herself any longer. Margaret’s husband Jim calls Margaret’s employer to inquire about her benefits, only to find that they will not speak with him or provide him with information unless they have written authority from Margaret to do so.

If Margaret had appointed Jim as her attorney in an Enduring Power of Attorney, Jim could have provided a copy of that to the employer and any other company or person he needs to deal with to obtain the information he needs to handle Margaret’s finances, insurance and benefits.

If Margaret did not have an Enduring Power of Attorney, Jim would have to obtain affidavits from two of Margaret’s doctors confirming her incapacity, prepare an affidavit himself with evidence of all of Margaret’s assets and liabilities (even those held jointly with Jim), provide all of this information to the Public Guardian and Trustee and pay a fee for them to review it and then make an application to the Court for an order appointing him as guardian over Margaret.

This is called an Adult Committeeship – the process can take many months and the cost can be thousands of dollars. With the Committeeship ordered by the Court, Jim then will have the proper authority to deal with Margaret’s finances, insurance and benefits as well as her personal care decisions.

As you can see, having an Enduring Power of Attorney in place is more economical and more time efficient, particularly in a crisis situation.

You may also create a Power of Attorney that is for limited purposes and will not endure if you become mentally incapacitated. These are effective for such things as conveying property or dealing with other financial matters while you are required to be out of town and cannot attend to a particular matter personally.

Your Bank or Credit Union may have Power of Attorney forms you can use at their institutions, both limited and enduring. These are convenient but please remember that this Power of Attorney is limited to accounts at that particular institution. It will not let your attorney deal with accounts at other financial institutions, the government or your insurance company. With a general Enduring Power of Attorney, you will have all financial and legal matters covered.

A Power of Attorney is used to delegate financial and most legal decisions. This is true for both a Power of Attorney and an Enduring Power of Attorney. However, your attorney cannot make medical or health care decisions for you, such as consenting to surgery or medical therapies for you. For these decisions, you will require a Representation Agreement, which will be the topic of Part III of our series on personal planning.

If you would like advice regarding the preparation or amendment of an Enduring Power of Attorney or for more information regarding personal planning matters please contact Chahal Priddle LLP at 250-372-3233 to set up an appointment today.