There are three types of power of attorney – each addresses a different estate planning need.
In Ontario, there are 3 different types of powers of attorney you can give someone:
- A non-continuing power of attorney for property
- A continuing power of attorney for property
- A power of attorney for personal care
1. Non-continuing power of attorney for property
This is used in specific situations for a specific length of time (for example, when you’re out of the country). You outline the specific tasks your attorney is allowed to do on your behalf, and for how long.
A non-continuing power of attorney is automatically revoked if you become mentally incapacitated, so it’s not a substitute for a continuing power of attorney. Make sure you have a continuing power of attorney in place as well.
2. Continuing power of attorney for property
This authorizes another person to act on your behalf in financial matters if you become mentally or physically incompetent. If you are unable to act on your own behalf, your attorney can:
- pay your bills,
- apply for benefits you may be entitled to as a result of your disability,
- collect pension and other income you’re entitled to,
- monitor your investment portfolio, and
- ensure your assets are otherwise protected.
You can make the power of attorney as specific as you want. Just make sure it’s broad enough for your attorney to carry out your wishes and manage your affairs effectively. This usually means giving fairly broad powers to manage your financial affairs in case of incapacity.
3. Power of attorney for personal care
This lets someone else make health-care decisions on your behalf if you become incapacitated.
These health-care decisions can be difficult, involving your quality of care and possibly your continued life support. Be sure you choose an attorney who is prepared to handle the emotional toll that these responsibilities may take.
If the decision is about medical treatment or admission to a long-term care facility, a health professional must determine that you are incapable of these decisions before your attorney can act.
Make a living will part of your power of attorney
As part of a power of attorney for personal care, many people include what’s known as a living will. This is a statement of wishes about what they want and don't want their doctors to do if they are not able to express their own wishes about end-of-life health care.
For example, many people write 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.
The benefit of including such a statement 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.
Entitlement to payment
Your attorney under a continuing power of attorney for property has a statutory right to be paid. If the power of attorney document does not address payment, your attorney will be entitled to:
- 3% of money received by the attorney,
- 3% of money paid out by the attorney on your behalf, and
- 3/5 of 1% of the average annual value of the assets covered under your power of attorney.
You can specify a different payment amount by writing it in the document. You may also not want to pay your attorney anything – such as when a close family member takes on the role without expectation of payment. Be sure to include this in the document, as they will have a right to payment otherwise.
Your attorney under a non-continuing power of attorney for property or a power of attorney for personal care has no statutory right to be paid. However, you can include payment terms in your power of attorney documents if you want to pay them for their services. Your attorney can also apply to a court to ask for payment for their services.
Get legal advice: The Ontario government provides standard power of attorney forms, but you may want to have a lawyer draft a power of attorney that specifically meets your needs and circumstances. At the very least, consult a lawyer before signing a power of attorney. They will ensure the document clearly states the conditions under which it takes effect.
Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca
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