What Can Go Wrong if I Die without a Power of Attorney?
In my last blog post, we explored what it means to have a Will and, perhaps more importantly, what it means to you, your loved ones, and your possessions if you die without a Will. As part of my ongoing series to best educate you in being prepared for the “Unthinkable,” I’ll now discuss what a Power of Attorney is and what can go wrong if you die without a Power of Attorney (POA) being named.
If you’ve seen a lawyer or notary recently to discuss creating a will, you likely also discussed creating a Power of Attorney document. These two important pieces of documentation often go hand-in-hand. I work closely with several lawyers and notaries public to help ensure that my clients have all the necessary paperwork to rest easy, knowing you are fully prepared for the end of life and that your family members will have less to worry about. Please remember that I am not a lawyer and am not presenting you with legal advice.
What is Power of Attorney?
Simply put, Power of Attorney establishes someone to legally be able to make financial and legal decisions for you. Despite the fact that they do not have to be a lawyer, the person you name is now called an attorney in this respect. Power of Attorney therefore means that the person has the power to act legally on your behalf. Whomever you choose must be clearly mentally capable to make decisions for you.
Why is Power of Attorney Important?
Many of us may be familiar with the concept of snowbirds. For me, it was my grandparents going to Florida every winter for six months. My Mom was their Power of Attorney, so she could take care of any legal or financial matters that arose while they were out of Canada. I remember her taking me to the bank with her when I was little, to do Grandpa and Grandma’s banking. What she had was specifically referred to as Limited Power of Attorney. This is essential for people who travel for work or pleasure, especially if you get injured in another country. You can also very specifically limit what actions your POA is or is not allowed to take, such as bank deposits only.
A general Power of Attorney has the same powers but without the limited time frame on it. However, this POA ends immediately upon your death or cognitive incapacitation. To prevent this immediate cessation, you would get Enduring Power of Attorney which does not end upon mental incapacitation but rather allows for you to make up your mind while your mind is sound and have that person still take care of your finances and legal concerns should you develop a cognitive impairment or permanent unconsciousness. As you can see, having a Power of Attorney named is vital to assisting with protecting your assets and your family.
What Doesn’t Power of Attorney Do?
The big caveat here is that Power of Attorney does not give the person named any license whatsoever to make healthcare decisions for you. This is why a Living Will (aka Advance Directive) and Representation Agreement are so important. I will be writing about those in future blogs but you can also read about them now on my website. (This may be confusing for people who have dual citizenship or used to live in the United States, because there, the terminology used instead of a Representation Agreement is, you guessed it, Durable Health Care Power of Attorney.)
What Happens if I Don’t Have a Power of Attorney Established?
If you die or become cognitively impaired and do not have Enduring Power of Attorney, someone actually has to apply to the Supreme Court of Canada to be name to the committee to deal with your estate. Can you imagine your family members, already grieving or struggling with your illness, having to go through all those legal hoops? That’s why it’s best to deal with the paperwork now and save everyone the stress and hassle later. They’ll also save on the legal fees with having to go to Supreme Court! Your family will thank you.
What Do I Do Now?
Either a lawyer or a notary can assist you in drafting your Power of Attorney document. Furthermore, due to COVID-19, there is currently a ministerial order in place to allow for these signatures to happen electronically, so there’s no better time to get this done! To make sure the legal language used is correct and can be upheld in a court of law, please consult your trusted lawyer or notary, or contact me to put you in touch with one of my trusted colleagues. If you have questions about any of the content here, or you’re thinking about drafting up your living will and want to talk, feel free to call or email me.