What is a Power of Attorney?
This legal paper names someone to make financial decisions for you in certain situations when you can’t do so yourself. You can choose someone you trust, who knows you and will respect your wishes.
Tip: You can give a Power of Attorney to more than one person. For example, you can name your spouse as your main Power of Attorney. Then you can name another person as a backup in case something happens to your spouse. This is often a good idea if the two of you travel a lot together. If both of you were hurt in an accident, you would still have someone legally able to make important decisions for you.
How does a Power of Attorney work?
In Ontario, there are three different types of powers you can give someone. Each one works in a slightly different way.
1. A non-continuing Power of Attorney for property
• Applies when you are still well, but cannot manage your affairs for some reason
• Limited to a set period of time or a specific task
• Ends if you become mentally or physically unable to make decisions yourself.
Example: If you leave the country for the winter, you may want someone to manage your investments in Canada.
2. A continuing Power of Attorney for property
• Only applies if you become mentally or physically unable to express your wishes
• Limited to certain decisions about your money, investments, and property.
Example: If Alzheimer’s disease runs in your family, you may want to appoint someone to pay your bills and manage your money in case you get sick.
3. A Power of Attorney for personal care
• Only applies if you become unable to make these decisions yourself because of illness or injury
• Limited to decisions about your medical treatment, as well as day-to-day needs such as food, clothing, and shelter.
What is a Living Will?
This legal paper states what you want and don’t want your doctors to do if you are not able to express your own wishes. The benefit is that your loved ones will know what to do in a medical crisis – and they won’t have to wonder later if they did the right thing. This can be a big help to your family at a very difficult time.
Examples: Many people write down that they don’t want to be kept alive on life support if there is no hope they’ll recover from a bad accident or illness. Many people also state their wishes about organ donation.
Remember: You don’t know if you will always be able to express your wishes
If you don’t state your wishes in legal form, will your loved ones know what to do in an emergency? That’s why a Power of Attorney and a Living Will are so important. Ask your lawyer to help you deal with these important legal papers.
« Related contentPrevious
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.