What is this Power Of Attorney? What significance does it have under the Canadian Laws? And what should you as a citizen know about the Power Of Attorney and its functions? If these are some of the questions whose answer you’re looking for, then you have landed at the right place.
With changing life trends, many Canadian Citizens are concerned about managing their financial and legal matters. The risk of deteriorating health or any other inevitable accidents makes them question their legal safety. Therefore it is always better to pre-plan one’s affairs, obtaining legal advice, and arranging help in managing legal matters.
When this happens, two solutions always pop up to the rescue, and they are Joint Bank Account and Power of Attorney. Before arriving at a conclusion on which solution needs to be taken up, it is very important to have a thorough study of each option as there may be risks involved.
With passing age, it becomes harder to manage one’s own affairs, solve math problems as well as take decisions on financial and legal matters, and that is exactly why it becomes essential to choose a trusted individual or a family member to be an attorney as a form of life support. The different decisions that an attorney is eligible to take include taking Financial Decisions, Legal Advice, Gifting Money, making Health Care decisions, and recommending a guardian.
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What is a Power Of Attorney?
In simple words, a Power of Attorney or POA is a legal document or a representation agreement in British Columbia that lets you give authority to a person or one or more persons to handle your money, property, or financial affairs on your behalf.
The person who hands over the authority is called the “Principal,” and the person who receives the authority is thereby called the “Attorney” or an “Agent.” There is no special requirement that there should exist only one attorney. If a principal wishes to, they can always have more than one attorney. It is also not necessary for an agent to be a lawyer to take up the position.
Let’s take a look at some of the requirements that are needed for a Power Of Attorney to be a valid Legal Document In British Columbia:
- For a POA to be valid, the person signing the legal document or the representation agreement should be mentally capable. By mentally competent, we mean an individual who is sound enough to make the right financial and legal decisions.
- The exact date of execution of the POA must be maintained in the legal attorney document/representation agreement.
- The POA document/Representation Agreement must be signed by the primary individual or another individual in the presence of the primary individual.
- The Power of Attorney Document/Representation Agreement must be signed either by two witnesses or recognized before an authorized Notary Public of British Columbia.
Different types of Power of Attorneys exist to serve different financial and property-related situations depending upon the geographical position you live in. However, there are four different types of Power of Attorneys that outline a unique purpose of service. Let us take a look at them and learn more about how they work.
General Power Of Attorney
According to the Powers Of Attorney Act, The person to whom the Power Of Attorney is given is called the agent, and the person who appoints the agent is called the principal. When a General Power of Attorney is in consideration, the Agent is liable to take all or some financial decisions like opening up of bank accounts, giving legal advice, and managing the personal finances of the principal. In contrast, the Principal is considered mentally capable.
Although there are certain circumstances where this Power Of Attorney ends, for instance, the Power of Attorney can be revoked or discarded if a person loses the capacity of their power, becomes mentally incapable, revokes attorney by will, or passes away.
This type of Power of Attorney can either be “specific” or “limited” in concern with authority. By “specific,” we mean that this Attorney form gives authority to complete a certain task. On the other hand, powers granted through “Limited” Power of Attorney give authority only over a specified duration of time.
Durable Power Of Attorney
While a General Power Of Attorney is revoked in situations where a person is mentally incapable, revokes attorney by will, or passes away, a Durable Power Of Attorney still lets the agent keep power in the specified situations due to ill health accident. The agent is in a position to make crucial health care decisions for the principal.
Durable Power Of Attorney is usually made when planning for medical emergencies, and in most situations, the person appointed is one of the family members. This helps the Attorney granted family members to take up legal authority immediately after being handed the Attorney forms. The Attorney’s actions are generally implemented when the Principal loses their mental capacity to make health care decisions for the Principal.
It is very important to maintain and keep these attorney documents intact to avoid any confusion and disruptions when tough calls are to be made. These attorney documents are also referred to as the Durable Power Of Attorneys for finances and real estate.
The different financial affairs where a Durable Power Of Attorney can be exercised are :
- Buying and Selling of Property, Real Estate
- Financial Institutions to manage bank accounts, bills, and Investments
- Tax Returns
- For accessing Government Benefits
Special Or Limited Power Of Attorney
The Special POA is made when only a particular task is to be assigned to the authority or when authority is needed for a specified time. The person to whom this type of Power Of Attorney is assigned is known as ” Attorney in fact” and is also known as Limited Power Of Attorney.
A Special or Limited POA is usually made when the principal, for various reasons, cannot go through with the execution of certain decisions by himself. The principal uses the agent to communicate with the third party and get things done. What’s interesting about a Special Power Of Attorney is that a principal can appoint multiple agents via multiple Special Power Of Attorneys to act jointly and complete different tasks.
A Special POA is further divided into 4 more types
- Limited Power Of Attorney: Valid for a particular transaction or limited time.
- General Power Of Attorney: Is valid from the time of assignment to the principal’s death.
- Springing Power Of Attorney: Is effective from a future assigned date till the completion of an event.
- Medical Power Of Attorney: This is valid from the time the principal is mentally incapacitated and lets them make important health care decisions for the principal.
Springing Durable Power Of Attorney
A Springing Durable Power Of Attorney is a type of Durable POA where enduring power can take place only on certain occasions. For instance, if a Principal makes a Power Of Attorney for when he is disabled if a member of the Military makes a Power Of Attorney when he has to leave the nation for a long time.
With changing of rules from place to place, it is very important to specify what exactly “incapacitated” means in their document. If not clear, there are chances that the POA may not get executed. There may be multiple attorneys to this type of POA, and any alternate attorney can assume power.
If Agent is enduring power in a situation of incapacitation, attorney forms must state that a legal document from one or more Advance Health Care Directive states that the Principal is clinically incapacitated.
Common FAQ’s About The Power Of Attorney in Canada
Q) Can a Power Of Attorney be used to claim property even after the Principal’s death?
There exist two major types of Power Of Attorneys:
- Ordinary Power Of Attorney is applicable when the principal is considered mentally capable and is revoked when they lose his/her mental stability.
- Enduring Power Of Attorney is applicable when the principal loses their mental stability and needs someone to make decisions that are in favor of their best interests.
However, in both cases, the Power Of Attorney Ends when the Principal and cannot be used to claim any financial assets or property on the Principal’s behalf.
Q) When should one consider making a Power Of Attorney?
- When you wish to travel to another location for a longer time.
- When you wish to have a person you trust to be involved in your personal life or financial affairs under your power.
- When you wish to appoint a person or more than one person to make crucial decisions in situations where you go mentally incapable.
- When your career obligations demand you to leave the country for a longer duration.
- When you own a large business/trust and are worried about its functioning in your absence.
- When you wish to have your business/trust function in particular ways as per your specified ways in situations when you are incapacitated.
Q) What are the qualities needed to be a valid “Attorney” or “Agent”?
- An Attorney must be an adult with a sound, capable mind who can deal with an adult’s financial affairs.
- An attorney must be someone who you trust and may or may not be a family member.
- An Attorney cannot be a Bankrupt Individual who is banned by Financial Institutions.
- An Attorney cannot be the owner, employee, or any other member of the Nursing Home staff to which the principal is admitted.
- An Attorney should have the Principal’s best interests at heart and should manage to make sound health care decisions for them when called to do so.
- It is required that an Attorney regularly maintains a very precise record of all of the transactions that have been carried out in the Principal’s absence.
Q) Is it possible to revoke a Power Of Attorney if a person is mentally incapable?
Yes, If It is an ordinary one, it is generally revoked and loses capacity once the principal becomes mentally unstable. If it is an Enduring Power Of Attorney, revoking it is impossible in the specified situation due to its broad powers.
Q) Is the “Attorney” or “Agent” still allowed to act while the Principal is available and can take care of their finances?
A valid POA is all set and in action from the moment, its legal documents are executed despite the Principal’s availability. However, the document needs to specify the situations in which the attorney’s authority is effective.
However, Canada is a large country with numerous States, Provinces, and Territories, and the laws concerning a Power Of Attorney differ with location changes. It is very necessary to do thorough research on the laws of the particular area before taking any legal action. With the fast pacing world, inevitable situations are a thing of every day. It is always better to counter them with smart decisions like having a Power Of Attorney that supports your functioning.Why Try Out Rocket.net - IcyCanada's recommended hosting provider