by Sean Cooper.
A long weekend is the perfect time to relax, reflect and enjoy some quality time with family and friends. It’s also the ideal time to get caught up on the things we often neglect. One of those important things is a power of attorney. We’ve already covered why it’s important to have a valid will and what happens if you die without one, but an important, yet often overlooked topic, we haven’t covered yet is a power of attorney.
A power of attorney is an important legal document every Canadian adult should have, yet the vast majority of us don’t have one. According to a LAWPRO survey, 71 percent of Canadians adults don’t have a signed power of attorney. That’s significantly higher than those who don’t have a signed will (56 percent of Canadian adults).
The fact that 7 in 10 Canadian adults don’t have a power of attorney is quite alarming. While a lot of millennials believe that they don’t need a will because they don’t have dependents or property, they do actually need a power of attorney in most case. And it’s never too early to get one. Anyone over the age of 18 should have one.
What is a power of attorney?
A power of attorney, sometimes referred to as a “living will,” is a legal document that gives someone you trust (called your attorney) the authority to make decisions on your behalf if something happens to you and you’re not able to look after your affairs on your own.
To understand how a power of attorney works, it helps to think of your power of attorney like disability insurance (it takes care of you while you’re still alive) and your will like life insurance (it takes care of your loved ones when you pass away).
Many Canadians mistakenly assume just because they have a will they’ll be taken care of. While that may be true in the afterlife, you won’t be taken care of in the here and the now unless you have a signed power of attorney.
What happens without a signed power of attorney?
To illustrate the importance of having a power of attorney, look no further than the infamous Terri Schiavo case. This story made news headlines around the world when an American woman named Terri found herself in an irreversible vegetative state. This caused years of fighting in her family on how she should be best cared for. Although the rules for living differ between provinces and countries, this fighting could have all been avoided if Terri had a power of attorney.
In Ontario without a power of attorney, the Public Guardian and Trustee may look after your health and finances if no one suitable can be found. This may or may not be according to your wishes. It can be time-consuming and costly for loved ones to gain control through the courts. All this could have been avoided with a power of attorney.
Powers of attorney for personal care and property
In Ontario, there are two types of powers of attorney. A power of attorney for personal care and a power of attorney for property.
Power of Attorney for Personal Care: If you become mentally incapable of making decisions on your own behalf, your power of attorney can make decisions regarding your health care, housing, meals and clothing, among other things. It also spells out life support measure you would and wouldn’t accept.
Power of Attorney for Property: If you’re unable to make financial decisions on your own behalf, your power of attorney can make decisions about your financial affairs, including paying your bills, managing your investments and collecting any money that’s owed to you.
Car crashes are a leading cause of death. If you were to become physically or mentally incapacitate, without a power of attorney no one will be able to immediately take care of your finances. Bills could be left unpaid. Your mortgage could fall into arrears. You could even lose your house. This could means that your heirs end up with very little or nothing.