In many situations, planning ahead can be a wise move. Before you make a career move, invest money, take a vacation or buy a house, you take the time to consider the many options and contingencies. Perhaps you even plan for unexpected emergencies by having money put aside or people you can count on. This way you may be able to avoid costly mistakes and endless frustration.
What would happen to all that planning and careful management of your finances if you should become incapacitated and unable to handle your affairs on your own? An accident or illness can quickly change the direction of your life, and you may not be able to manage the financial and legal matters that are important to your future. Turning these matters over to a trusted individual through a power of attorney may provide you with some peace of mind.
Understand what you are signing
An enduring power of attorney is a powerful document that authorizes someone whom you name to handle your financial and legal affairs if you should be unable to do so. This may occur because of an accident that leaves you unconscious, an illness that temporarily or permanently affects your mental capacity, or another situation that will prevent you from dealing with your own affairs, such as a trip abroad. Some important facts to understand about designating a power of attorney include the following:
- There are several types of POA, and it is wise to obtain legal advice about which is most appropriate for you.
- Your POA document can place limitations on your agent, such as what circumstances trigger his or her authority.
- You may have to undergo a capacity test or have doctors attest to your incapacity for your attorney to take over your affairs.
- Your chosen attorney must sign the POA document to obtain legal authority to act on your behalf.
- Your attorney must keep careful documentation and make periodic reports to British Columbia courts.
- You have other alternatives to a POA, such as joint accounts or pension trustees if your finances are simple to maintain.
You are not alone if the idea of giving someone else control of your finances makes you nervous. Undoubtedly, you have heard stories of people whose POA proved untrustworthy. However, with some sound advice and guidance, you may find a reliable and objective person to entrust with this delicate role. The person you choose should be someone who is capable of managing your unique financial circumstances, is organised and above all is someone you trust implicitly.