What is a Power of Attorney?
A Power of Attorney is a legal document that grants the authority to one person to sign documents and make certain decisions on behalf of another.
When is it Used?
This document is used in a situation where, for example, a legal document (such as a Transfer of a home) must be signed but the person who would normally sign it is out of the country at the time. The person who is the owner of the home would sign a Power of Attorney giving authority to another person, such as a spouse or child, to sign the Transfer of that home in his or her absence. The Power of Attorney is then registered at the Land Title Office with the Transfer and the Land Title Office will recognize the authority of the attorney to sign on behalf of the registered owner of the home.
One spouse often gives a general and Enduring Power of Attorney to the other. A child of the couple can be named as an alternate attorney. In this case, if one of the spouses is seriously injured or in ill health and no longer be capable of taking care of legal affairs, then the Power of Attorney which was granted allows the other spouse to take over decision-making, sell properties, pay bills, and generally deal with the affairs of the ill spouse.
If the appointed spouse then dies, the person that has been appointed as an alternate (such as the child of the couple), could take over the responsibility of the infirm parent, make decisions for the parent’s care and pay the parent’s bills, etc. until that parent’s death.
How Long Does it Last?
A Power of Attorney can last for a lifetime, but you need to put language into the document to ensure that it will be an enduring Power of Attorney. So, speak to your Lawyer to ensure that this is done. In addition, you can limit the power for a specific time or to allow signing authority in only limited circumstances. You need proper language in the document to do this.
Can I Make Changes?
A Power of Attorney may be cancelled at any time at the decision of the person granting the attorney. A Power of Attorney can be amended from time to time to take changing circumstances into consideration. Cancellations or amendments can only be made as long as the person granting the Power of Attorney is mentally competent to do so.
Representation Agreement
The Provincial Government has amended the legislation dealing with Powers of Attorney, in order to add a new form of authority, called a Representation Agreement. The old forms of the Power of Attorney are still in place under the legislation, however, there is a more complex agreement format that is now available through this new legislation. Representation Agreements are much lengthier documents and give far more detail as to how a Power of Attorney is to act or is capable of acting under various circumstances. Therefore, the Power of Attorney document which is usually one or two pages, is a simple form of giving a party a full authority to deal with the affairs of another. A Representation Agreement outlines in detail the authorities, restrictions and agreements between the party giving the Attorney position and the party receiving it. Under each circumstance, the party granting the power of Attorney or Representation Agreement will have to make a determination with the advice of their solicitor as to which document is most effective for their particular circumstances.
If you need any assistance with the preparation of a Power of Attorney, a Will or a Representation Agreement, or with other estate planning issues, contact “Your Trusted Advisors” at Porter Ramsay.