Why smart financial planning includes a Power of Attorney
Your estate planning must include more than just providing for your family. You need to plan for the day when you may be unable to manage your own affairs. It is prudent, as well as offering peace of mind, to draw up an enduring or continuing Power of Attorney (POA).
In Canada, you can have a general POA, giving your designated ’attorney’ (not necessarily a lawyer) authority to manage your affairs while you are still capable of doing so. But it ends when you are unable to be directly involved. The enduring or continuing POA is more extensive. It takes effect when you say so. This could be at the time you sign it or only when you become mentally incapable of acting for yourself. You decide the timeline.
Another important POA is for health care. This is also called a personal or health directive, a representation agreement, or a mandate. Visit this federal resource to learn more about POAs.
Ideally, your POA should be local, in order to easily manage your money and property issues as they arise. Many people designate a trusted family member or friend to be their enduring or continuing POA. He or she will implement decisions made with your Financial Advisor (and it’s wise to have them separate: the person who manages your financial planning and the POA authorized to write the cheques).
Your agent doesn’t need a high degree of financial expertise; just diligence and the willingness to be involved in paying bills, selling assets such as your car when you can no longer drive, and carrying out other tasks to meet your needs and see to your comfort.
This document is usually prepared by a family lawyer and is quite inexpensive, but extremely valuable for older adults. Many lawyers will do it as part of developing your Will. You must be mentally capable at the time you sign a POA for it to be valid, so it’s important to get this planning in place.
A POA must be very clearly written to avoid arguments and confusion. Give yourself the support you deserve as an older adult. Talk to your Financial Advisor about who you might choose, and what details would be smart to include, for your POA.