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Difference between revisions of "Common Questions on Powers of Attorney"

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{{REVIEWEDPLS | reviewer = [[Kevin Smith]] |date= March 2017}}
{{REVIEWEDPLS | reviewer = [[Kevin Smith]] |date= March 2017}}
{{Power of Attorney TOC}}
{{Power of Attorney TOC}}A power of attorney is a legal document in which you authorize another person to take care of financial and legal matters for you. After considering [[Why Make a Power of Attorney|why you might make a power of attorney]], learn the steps involved in '''making a power of attorney'''.
==What is a power of attorney?==
[[File:Powerofattorneysigning.png|thumb|275px|right| link=| <span style="font-size:50%;">Image via www.istockphoto.com</span>]]
A '''power of attorney''' is a legal document. When you make a power of attorney, you give someone the legal power to take care of financial and legal matters for you. This might include paying bills, depositing or withdrawing money from your bank account, investing your money, or selling your home.


The person you give this power to is called the '''attorney'''. In this case, attorney does not mean lawyer.  
==Key considerations==
===Choosing your attorney===
[[File:Powerofattorneyolderclient.png|thumb|275px|right| link=| <span style="font-size:50%;">Image via www.istockphoto.com</span>]]


You are called the '''adult'''.
When you make a power of attorney, the person you authorize to take care of financial and legal matters for you is called the '''attorney'''.


A power of attorney does not give the attorney authority to make decisions about your health care or personal care. It covers financial and legal matters only.
You can choose as your attorney someone who is:
*age 19 or older, and  
*able to understand the responsibilities involved.  


A power of attorney is different from a will, which provides for the distribution of the things you own after your death. A power of attorney is a way to plan for the handling of your affairs during your lifetime.
The law has two restrictions on who you can name as an attorney. You cannot name:
*A caregiver who is paid to provide you with personal or health care services.  
*An employee at a facility where you live if the facility provides personal or health care services.  


=== Why have a power of attorney? ===
These restrictions do not apply if the person providing the care is your child, parent or spouse.


A power of attorney is a simple and inexpensive way to plan ahead and choose who will help you with your financial and legal affairs.  
Most people choose their spouse, a family member or a friend as their attorney.  


There are several reasons you might make a power of attorney.
For a fee you can choose a trust company as your attorney. You can also name the Public Guardian and Trustee (a government official), but you need to check in with them first.


A power of attorney can be a good option if you are physically unable to look after your affairs due to travel or injury.  
You can name more than one person as your attorney. If you do, you must write in the document whether they will act together or individually. If you don't specify, the default is that they must act together.


{{PLSStorybox
{{PLSTipsbox
| image = [[File:Headshot_-_Power_of_Attorney_-_Helga_-_2017-03-16.jpg|link=]]
|width = 50%
| text = "I want to spend the summer visiting my grandchildren in France. I'll be gone for several months, and I'd like to enable my niece to pay my bills while I'm away. I learned I can do that by making a limited power of attorney. In it, I authorized my niece to access my bank account only to deposit my pension cheques and pay my bills, and only until I come home from my trip." <br> - Helga, Victoria
| text = If you name only one attorney, it is very important to name an '''alternate attorney''' who will take over if something happens to your attorney. Be sure to describe clearly the circumstances when the alternate may take over.  
}}
}}  


A power of attorney set up so that someone can look after your affairs while you are traveling would be an example of a '''limited power of attorney'''. This is also called a '''specific power of attorney'''. Your attorney’s powers are limited to a specific task or a specific period of time. For example, you might give someone power of attorney to sign the papers on the sale of your home while you’re out of the country on vacation.
=== The attorney's powers and responsibilities ===


{{PLSStorybox
When you make a power of attorney, you give someone the legal power to take care of financial and legal matters for you. This might include paying bills, depositing or withdrawing money from your bank account, investing your money, insuring or selling your car, or selling your home.  
| image = [[File:Headshot_-_Power_of_Attorney_-_Anita_-_2017-03-16.jpg |link=]]
| text = "My husband William had an accident at work. He is in hospital in a coma. We have a joint bank account, so I can pay the bills. But our car is in William’s name and the insurance is due. William can’t sign. I wish William had made an enduring power of attorney appointing me as attorney. That way I could renew the insurance." <br>- Anita, Burnaby
}}


Another reason you might make a power of attorney is to prepare for the possibility you become mentally incapable due to age, accident or illness. With an '''enduring power of attorney''', you can appoint someone to act on your behalf for financial and legal affairs, and specify that the appointment continues in effect - or endures - if you become incapable of making decisions. (With a '''general power of attorney''', the appointment ends when you become mentally incapable.)
You can put '''limits''' on the power you give your attorney. For example, if you create a limited power of attorney giving your son only the power to deposit your pension cheques, then your son will have the legal power to do only that—deposit your pension cheques.


For more on enduring powers of attorney, see the section "[[Enduring Power of Attorney]]".
A power of attorney does not give the attorney authority to make decisions about your health care or personal care. (There are other planning tools for dealing with health and personal care.)


A power of attorney can also be set up to come into effect only when something happens to trigger it. This is called a '''springing power of attorney'''. You can appoint someone to act on your behalf if the triggering event happens. The triggering event can be when you become mentally incapable. For example, the appointment can be worded to come into effect “when two physicians have determined that I am no longer capable of managing my affairs”. Such a springing power of attorney is not active '''until''' you are incapable.  
The attorney is like your agent. He or she must act honestly, in good faith and in your best interests. Your attorney must not take a personal benefit from your property.


[[File:Power_of_Attorney_Types.png| link=]]
Your attorney must keep careful records of any financial activities, and must keep your affairs separate from his or her own.  


The types of power of attorney are not mutually exclusive. For example, an enduring power of attorney or a springing power of attorney can be limited to a specific purpose or time period.
===You can still make decisions===


=== Are there other options to plan for the future? ===
Having a power of attorney does not remove your decision-making rights. Decision making is not given away; it is shared between you and the attorney whenever possible. Your attorney cannot override a decision made by you while you are capable.


Yes. In BC, an enduring power of attorney is the most common document used to give another person the authority to take care of your financial and legal affairs in the event you become mentally incapable.  
Your attorney has a legal duty, to the extent reasonable, to foster your independence and encourage your involvement in any decision-making that affects you.


But there are other options.
===What you can do to prevent misuse of your power of attorney===


* In a '''representation agreement''', you can name someone of your choice to make decisions for you when you can no longer manage on your own. The person you name as your “representative” can make personal care and health care decisions for you. With a “section 7 representation agreement”, the representative can also be authorized to handle “routine management” of financial affairs and most legal matters. For example, your representative can pay your bills, deposit your pension and other income, purchase food and other personal care services, and make investments for you. However, they can not handle financial matters beyond the routine, such as buy or sell your real estate property or take out a new loan in your name.  
Be sure you choose someone you trust as your attorney. If possible, name more than one person. Talk to these people before you appoint them and make sure they understand what you expect from them, and when you expect them to act.  


* In a '''trust agreement''', you can put all your property and income in a trust. You can name someone of your choice to be the '''trustee''', and spell out terms of how the property is to be managed. The trust continues if you become incapable, and can even survive death, ensuring your affairs continue to be managed in a way that is consistent with the terms in the trust.
You can require the attorney to keep records of your finances and show you those records regularly. You should also review your bank statements.


* If your finances are not complicated, a '''pension trusteeship''' can be set up. Let’s say your only source of income is federal income security programs such as Old Age Security and the Canada Pension Plan, and your expenses are just rent, food and utilities. In that case, a capable family member or friend can sign up with the income security programs to receive your pension funds as trustee to pay the rent and bills.
Even a power of attorney that takes effect as soon as it is signed does not have to be used until you need help. You may want to give the power of attorney document to someone else you trust, and tell him or her when to give it to the attorney.  


* If your income is directly deposited into your bank account, you could set up a '''joint bank account''' with a trusted relation or friend. That person could help you with paying bills and making withdrawals. You need to be aware of the risks of a joint bank account. For example, any person named on the joint account is able to withdraw money from the account at any time. As well, note that in many cases, joint bank accounts include the “right of survivorship”. This means that if one of the account holders dies, the surviving account holder becomes the owner of the account.
Before you make a power of attorney you may want to talk to a friend, family member, community advocate, or legal professional. You can also insist that your attorney get legal advice about his or her responsibilities.  


If you become incapable of making decisions independently and you do not have an enduring power of attorney or one of these other planning tools in place, your family may have to go to court to get the legal right to manage your affairs.
===Timing of a power of attorney===


== What about health care decisions? ==
A power of attorney can be written to come into effect as soon as it is signed. However, even a power of attorney that comes into effect on signing it does not have to be used immediately. Make sure your attorney knows when you want him or her to act.


A power of attorney deals '''only''' with your financial and legal affairs. It does not enable your attorney to make decisions about your personal care and health care. For example, a power of attorney would not allow your attorney to consent to health care on your behalf or to make decisions about where or with whom you will live.
A limited power of attorney (a power of attorney that limits the attorney’s powers to a specific task or a specific period of time) ends when the task it describes is done, or on the date it specifies. For example, if you make a limited power of attorney to sell a piece of property, the power of attorney ends when the property is sold.


Under BC law, if you want to have someone of your choice make decisions about your personal care and health care when you no longer can, you can make a '''representation agreement'''. In a representation agreement, you name whoever you want - such as a friend, relative, spouse, or adult child - to make personal and health care decisions for you, or assist you in making decisions, if you become incapable of making decisions on your own.  
A general power of attorney '''automatically ends''' in these circumstances:
*If you become incapable, unless you have an enduring power of attorney clause that makes the power of attorney continue to have effect if you are incapable.
*If your attorney dies, unless you name an alternate or more than one attorney.
*If you die.
*If the court appoints a committee to make decisions for you. A committee (pronounced caw-mi-tay or caw-mi-tee, with emphasis on the end of the word) is a person or body (such as the Public Guardian and Trustee) appointed by the court to look after your legal and financial affairs in the event that you become incapable of managing your affairs.


Another option to be aware of is an '''advance directive'''. In an advance directive, you can write instructions to your health care provider about what kind of health care treatment you want and don’t want, including life support or life-prolonging medical interventions. No one will be asked to make a decision for you when the advance directive applies.
You can also [[Ending a Power of Attorney|cancel a power of attorney]] at any time.


== Legal capacity requirements ==
==Special requirements==
===There are special requirements relating to real estate===


In considering the various planning options, a key factor to be aware of is that there are different '''legal capacity''' requirements. Legal capacity refers to a person’s ability to make binding decisions or agreements.  
If you want your attorney to have the power to sell your real estate property or deal with mortgages or easements, there are special requirements.  


Someone who doesn’t have sufficient legal capacity to make an enduring power of attorney may still be able to make a representation agreement. A person can make a section 7 representation agreement even if they cannot manage their routine financial affairs or look after their daily needs. This makes a section 7 representation agreement a very useful “last resort’’ document when someone has not made any other planning documents and they are starting to lose their capacity.
You must go to a lawyer or notary public to have the document prepared, and here are a few things you should know:
 
*Your power of attorney must use the exact name that is listed on your real estate property at the Land Title Office. For instance, if the name on the property deed is “Chung Hon Lee”, you cannot use “C.H. Lee” in the power of attorney. If you are not sure of the exact name, do a search at the [https://ltsa.ca/ Land Title Office].
A lawyer or notary public can guide you on which planning documents best fit your situation.  
*A power of attorney for real estate gives your attorney the power to sell or transfer property to someone else, but not to him or herself. If you want to include that power, it has to be specifically written in. Discuss this with your lawyer or notary.  
 
*You must sign the power of attorney in the presence of a lawyer or notary, and the lawyer or notary must also sign.  
== You can still make decisions ==
*You must register the power of attorney at the Land Title Office and pay the registration fee. Check with the [https://ltsa.ca/ Land Title Office] for the current fee. You can wait to register it, but don’t wait to check with the office to make sure it meets the requirements.
*A power of attorney for real estate ends automatically in three years unless it is an enduring power of attorney (a power of attorney that continues to have effect if you are incapable) or you say in the power of attorney “Section 56 of the Land Title Act does not apply”.


Having a power of attorney does not remove your decision-making rights. Decision making is not given away; it is shared between you and the attorney whenever possible. Your attorney cannot override a decision made by you while you are capable. Your attorney has a legal duty, to the extent reasonable, to foster your independence and encourage your involvement in any decision-making that affects you.
===There are special considerations for enduring powers of attorney===


== Choosing your attorney ==
With an enduring power of attorney, you can name another person to make financial and legal decisions for you, and the appointment continues—or “endures”—in the event you become mentally incapable. See the section "Enduring Powers of Attorney" to see the special considerations for this type of power of attorney.


When making a power of attorney, you can choose as your attorney someone who is:
==Make the power of attorney==
* age 19 or older, and  
===Step 1. Choose your attorney===
* able to understand the responsibilities involved.  
Your attorney will have significant power, so choose someone you trust, and who is comfortable with financial matters. Take the time to talk with that person about what you want and would expect them to do.


The law has two restrictions on who can be appointed as an attorney. You cannot appoint:
===Step 2. Prepare the power of attorney===
* A caregiver who is paid to provide you with personal or health care services.  
* An employee at a facility where you live if the facility provides health or personal care services.
 
These restrictions do not apply if the person providing the care is your child, parent or spouse.


Most people choose their spouse, a family member or a friend as their attorney.  
The BC Ministry of Justice has an enduring power of attorney form available online. You do not have to use this form, but it gives you an idea of how to make a power of attorney.


For a fee you can choose a trust company as your attorney. You can also name the '''Public Guardian and Trustee''' (a government official), but you need to check in with them first.
Most people will go to a notary public or a lawyer to prepare their power of attorney. In fact, you must sign the power of attorney in the presence of a notary public or lawyer in order for your attorney to have the power to deal with your real estate.  


{{PLSTipsbox
{{PLSTipsbox
|width = 50%
|width = 50%
| text = Your attorney will have significant power, so choose somebody you trust, and who is comfortable with financial matters. Take the time to talk with that person about what you want and would expect them to do.
| text = Particularly if you have a complicated or unusual situation, it’s best to get some professional help. If you go to a lawyer or notary public, find out how much they will charge you. Phone around and compare prices. See the "[[Where to Get Help for Power of Attorney|Where to Get Help]]" section for options for free or low-cost legal help.
}}  
}}  


You can appoint more than one person as your attorney. If you do, you must write in the document whether they will act together or individually. If you don't specify, the default is that they must act together.
=== Step 3. Sign the power of attorney  ===


=== What if something happens to your attorney? ===
You must sign a power of attorney with a handwritten signature. (It is one of the few documents that the law in BC dealing with electronic signatures does not apply to.)


If you name only one attorney, it is very important to name an alternate who will take over if something happens to your attorney. However, you also need to describe very clearly the circumstances when an alternate may take over.
Your signature must be witnessed. The witness must be present when you sign, and the witness must sign the power of attorney.


=== Can your attorney be someone who lives in another province? ===
==== If you want your attorney to have powers relating to real estate or vehicles ====
In order for your attorney to have the power to sell your real estate or deal with mortgages or easements, you must sign the power of attorney in the presence of a notary public or lawyer. The lawyer or notary must also sign.


Yes. The person you name as your attorney does not have to live in British Columbia.
In order for your attorney to have the power to sell your vehicle or renew its insurance, your power of attorney may need to be notarized. Notarizing means a notary public puts his or her seal on the document when you make it, to confirm that you and the witness signed it in front of him or her.


=== Do you have to pay your attorney? ===
==== If you are making an enduring power of attorney ====
There are special requirements if you are making an enduring power of attorney (a power of attorney that continues to have effect if you are incapable).


Your attorney is entitled to be paid back for any reasonable out-of-pocket expenses. If you want to pay your attorney a fee, you must write this in the power of attorney. The document must authorize the fee and set out the rate.
You must sign and date the enduring power of attorney and have the signing witnessed by two witnesses. The witnesses must also sign and date the power of attorney in front of you.


If a trust company or the Public Guardian and Trustee is your attorney, they will ask you to sign an agreement that says they can charge fees.
You need only one witness if the witness is a notary public or a lawyer.  


== The attorney's powers and responsibilities ==
The attorney must also sign the enduring power of attorney in front of two witnesses. You and your attorney do not have to sign at the same time.


The attorney is like your agent. He or she must act honestly, in good faith and in your best interests. Your attorney must keep careful records of any financial activities, and must keep your affairs separate from his or her own.  
{{PLSTipsbox
|width = 50%
| text = A person cannot witness a signature if they are being appointed as the attorney, or if they are a spouse, child, or parent of the attorney. Nor can a person witness your signature if they are employed by the attorney, unless you are appointing a lawyer, notary public, the Public Guardian and Trustee, or a financial institution as your attorney.  
}}


A general power of attorney gives your attorney the power to do anything financial or legal that you can’t do for yourself. This could include dealing with bank accounts, getting information from Canada Revenue Agency in order to do your income tax, insuring or selling your car, or selling real estate.
===Step 4. Register the power of attorney for safekeeping===


=== What can you do to prevent misuse of your power of attorney? ===
If you have made an enduring power of attorney, you can register it with the [http://www.nidus.ca/?page_id=238 Nidus Personal Planning Registry]. This secure online service is a centralized registry for storing enduring powers of attorney and other personal planning documents.


Before you make a power of attorney you may want to talk to a friend, family member, community advocate, or legal professional. You can also insist that your attorney get legal advice about his or her responsibilities.  
You are not required to register an enduring power of attorney. However, it is helpful as a safeguard for your affairs and making your power of attorney available to others who need to know. When you register a planning document, you can permit access to institutions and individuals you trust.


Attorneys must keep accurate records, and attorneys must not take a personal benefit from the person’s assets. Be sure you choose someone you trust. If possible, name more than one person. Talk to these people before you appoint them and make sure they understand what you expect from them, and when you expect them to act.
===Step 5. Register the power of attorney with the Land Title Office===


Even a power of attorney that takes effect as soon as it is signed does not have to be used until you need help. You may want to give the power of attorney document to someone else you trust, and tell him or her when to give it to the attorney.  
If your attorney needs to deal with real estate property on your behalf, the power of attorney must be registered with the [https://ltsa.ca/ Land Title Office]. Sometimes people do this at the time they make the power of attorney or let their attorney do it if the time comes.


You can put limits on the power you give your attorney. You can require the attorney to keep records of your finances and show you those records regularly. You should also review your bank statements.
==Common questions==


=== Are there special requirements relating to real estate? ===
===Do I have to pay my attorney?===


If you want your attorney to have the power to sell your real estate property or deal with mortgages or easements, there are special requirements.  
Your attorney is entitled to be paid back for any reasonable out-of-pocket expenses. If you want to pay your attorney a fee, you must write this in the power of attorney. The document must authorize the fee and set out the rate.  


You must go to a lawyer or notary public to have the document prepared, and here are a few things you should know:
If a trust company or the Public Guardian and Trustee is your attorney, they will ask you to sign an agreement that says they can charge fees.


* Your power of attorney must use the exact name that is listed on your real estate property at the Land Title Office. For instance, if the name on the property deed is “Chung Hon Lee”, you cannot use “C.H. Lee” in the power of attorney. If you are not sure of the exact name, do a search at the Land Title Office.
===Can my attorney be someone who lives in another province?===


* A power of attorney for real estate gives your attorney the power to sell or transfer property to someone else, but not to him or herself. If you want to include that power, it has to be specifically written in. Discuss this with your lawyer or notary.  
Yes. The person you name as your attorney does not have to live in British Columbia.  


* You must sign the power of attorney in the presence of a lawyer or notary, and the lawyer or notary must also sign.
===If I have property in another province or territory, will my BC power of attorney apply?===


* You must register the power of attorney at the Land Title Office and pay the registration fee. Check at your local Land Title Office for the current fee. You can wait to register it, but don’t wait to check with the office to make sure it meets the requirements.  
Possibly. However, the safest approach is to check with a lawyer in that province or territory.  


* A power of attorney for real estate ends automatically in three years unless it is an '''[[Enduring Power of Attorney|'''enduring power of attorney''']]''' or you say in the power of attorney “Section 56 of the ''Land Title Act'' does not apply”.
===What about powers of attorney made in another province or country?===


== Timing of a power of attorney ==
Each province in Canada has its own laws and procedures for powers of attorney. This information applies to residents of British Columbia who have finances and property in BC. For information about powers of attorney in another province or country, it’s best to consult a legal professional. You may also want to check your local library or bookstores for a book called ''Power of Attorney Kit'' by [http://www.self-counsel.com/ Self Counsel Press], or contact a public legal education and information provider in your province.
[[File:Powerofattorneyolderclient.png|thumb|275px|right| link=| <span style="font-size:50%;">Image via www.istockphoto.com</span>]]
=== When does the power of attorney start? ===


A power of attorney can be written to come into effect as soon as it is signed. However, even a power of attorney that comes into effect on signing it does not have to be used immediately. Make sure your attorney knows when you want him or her to act.
===If I made a power of attorney ten years ago, is it still good?===
 
=== When does the power of attorney end? ===
 
A '''limited power of attorney''' ends when the job it describes is done, or on the date it specifies. For example, if you make a limited power of attorney to sell a piece of property, the power of attorney ends when the property is sold.
A general power of attorney automatically ends in these circumstances:
 
* If you become incapable, '''unless''' you have an enduring power of attorney clause that makes a power of attorney continue to have effect if you are incapable.
 
* If your attorney dies, unless you name an alternate or more than one attorney.
 
* If you die.
 
* If the court appoints a '''committee''' to make decisions for you. A committee (pronounced caw-mi-tay or caw-mi-tee, with emphasis on the end of the word) is a person or body (such as the Public Guardian and Trustee) appointed by the court to look after your legal and financial affairs in the event that you become incapable of managing your affairs.
 
You can also cancel a power of attorney at any time.
 
=== If you made a power of attorney ten years ago, is it still good? ===


Yes. However, you should check it over to make sure that it will do what you want and the information is accurate. You may decide to make a new one.  
Yes. However, you should check it over to make sure that it will do what you want and the information is accurate. You may decide to make a new one.  


It’s a good idea to review all your financial affairs (including your will) every two or three years. Addresses change, and so do people’s lives. Stay up to date.
It’s a good idea to review all your financial affairs (including your will) every two or three years. Addresses change, and so do people’s lives. Stay up to date.  
 
== Questions about jurisdiction ==
 
=== What about powers of attorney made in another province or country? ===
 
Each province in Canada has its own laws and procedures for powers of attorney. This publication applies to residents of British Columbia who have finances and property in BC. For information about powers of attorney in another province or country, it’s best to consult a legal professional. You may also want to check your local library or bookstores for a book called ''Power of Attorney Kit'' by [http://www.self-counsel.com Self Counsel Press], or contact a public legal education and information provider in your province.
 
=== If you have property in another province or territory, will your BC power of attorney apply? ===
 
Possibly. However, the safest approach is to check with a lawyer in that province or territory.
 
=== Is a power of attorney made in one province okay in another? ===
 
It is likely the power of attorney made in one province will be recognized in another. However, it may not be effective in dealing with all real estate matters.
 
== Preparing the power of attorney ==
 
{{PLSTipsbox
|width = 50%
| text = The BC Ministry of Justice has an [http://www2.gov.bc.ca/gov/content/health/managing-your-health/incapacity-planning enduring power of attorney form available online]. You do not have to use this form, but it gives you an idea of how to make a power of attorney.
}}
 
Most people will go to a notary public or a lawyer to prepare their power of attorney. In fact, you must sign the power of attorney in the presence of a notary public or lawyer in order for the power of attorney to be recognized at the Land Title Office (see above).
 
In order for your attorney to have the power to sell your vehicle or renew its insurance, your power of attorney may need to be '''notarized'''. Notarizing means a notary public puts his or her seal on the document when you make it, to confirm that you and the witness signed it in front of him or her.


Particularly if you have a complicated or unusual situation, it’s best to get some professional help. If you go to a lawyer or notary public, find out how much they will charge you. Phone around and compare prices. See the "[[Where to Get Help for Power of Attorney|Where to Get Help]]" section for help finding a legal professional.


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