There are many issues that must be considered when planning your estate. Addressing a potential situation where a person may become mentally or physically incapacitated is one of the final parts of estate planning. Power of Attorney is a legal document that empowers a person to act on your behalf. When you become unable to make financial decisions due to illness, a standard Power of Attorney will entitle someone you choose to make decisions about your property and finances on your behalf.
In some territories and provinces, a completely different document is utilized to delegate decisions about a person’s care. A single document can empower your attorney to take both personal care and financial decisions. These documents are called power of attorney, Living Will, advance directive or a representation agreement. A Living Will may describe the type of medical treatment you prefer to receive should you become incapacitated. Consult a financial planner before creating a Living Will.
It’s advisable to have a certified financial or legal advisor prepare your Power of Attorney. Since Power of Attorney is a legal document that contains clauses necessary to entitle your attorney to act on your behalf and according to your wishes.
Difference between ‘enduring’ and ‘ordinary’ Power of Attorney
Enduring and ordinary are two major types of Power of Attorney. The ordinary power of attorney is relevant and valid as long as the donor is capable of acting for herself/himself. In other words, the power of attorney becomes invalidated if the donor dies or becomes mentally abnormal. It’s also important to consider that the donor must be normal at the time the power of attorney is signed. A power of attorney becomes invalid when it comes to bequeathing property upon the demise of the donor.
On the other hand, an enduring or continuing Power of Attorney allows your attorney to continue acting for you even if you become mentally incapable. It gives your attorney complete or partial authority to manage your finances or property. In some cases, you can have the Continuing Power of Attorney take effect only when you become mentally incapable.
Attributes of an attorney
You should be very careful when choosing your attorney. It’s important because your attorney will have complete authority to deal with your legal or financial matters provided there are no limitations specified on your Power of Attorney. Also, make sure your attorney has adequate financial management knowledge and time to look after your financial affairs properly. Keeping an accurate financial record and making decisions objectively will be two of the prime duties of your attorney.
The Power of Attorney should be in writing and signed by you in the presence of witnesses depending on the laws in your province or territory. Your attorney may have immediate authority even if you’re still capable. You should consult a certified financial planner who specializes in estate planning matters to make life easier.
About Kewcorp Financial
Kewcorp Financial provides estate planning services from preparing documents and creating a Will to Personal Directive and Power of Attorney. Get a free consultation or contact us to learn more about our estate planning service.