Powers of Attorney and Disability Planning
Powers of attorney are the documents in which you appoint another person or people to manage your property and make your personal care decisions while you are alive. These documents cease to be effective after you die. Making powers of attorney is an important aspect of estate and disability planning. Arguably it is even more important to make powers of attorney than a will, since powers of attorney are the documents that will affect you during your lifetime.
A person who is 18 years of age or older and has the requisite mental capacity can grant a power of attorney for property to another person, people, or trust company to manage his or her property (meaning real estate and other financial assets such as bank accounts and investments). This document usually takes effect immediately upon it being signed. In some cases, the effectiveness of the document will be delayed until the occurrence of a specific event, such as the incapacity of the grantor or the grantor having given written instructions to the attorney to commence acting.
A person who is 16 years of age or older and has the requisite mental capacity can grant a power of attorney for personal care to another person or people to make their personal care decisions (meaning decisions regarding health care, shelter, safety, nutrition, clothing, hygiene). This document only takes effect upon the incapacity of the grantor to make personal care decisions.
The person who makes a power of attorney is called the “grantor”. The person who is appointed to make decisions under a power of attorney is called the “attorney”.
If you do not make powers of attorney, and you become incapable of managing your property (for example, as a result of an accident or illness), there will be no person who is authorized right away to manage the assets you own solely. In the absence of a power of attorney for property, a person would have to apply to the court to be appointed as your guardian of property (which is an expensive process that can take several months to complete) in order to have access to your assets so he or she can manage them on your behalf, for example to pay your bills and access your money to buy things that you need. A common misconception is that spouses of an incapable person or parents of a minor child can automatically access the other spouse’s or child’s assets in order to manage them on his or her behalf – this is not the case. Even a spouse or a parent of a minor child does not have authority to access the other spouse’s or child’s property that they own solely without a power of attorney for property or guardianship of property.
With respect to personal care decisions, some types of personal care decisions can be made by a “priority” person (as determined by legislation) without the presence of a power of attorney for personal care or guardianship of the person. However, not all personal care decisions are privy to this treatment, you may not want the legislated priority person to be your substitute decision maker, or you may want more than one person to be responsible for making your personal care decisions jointly rather than just the priority person alone.
By making powers of attorney you can:
- Choose who you want to appoint to manage your property and choose when this appointment becomes effective
- Choose who you want to appoint to make your personal care decisions in the event that you are incapable of making these decisions yourself
- Choose substitute attorneys in the event that your primary attorneys are not able to act on your behalf because of refusal, resignation, death, mental incapacity or removal by the court
- Appoint multiple people to act jointly as your attorneys
Include “living will” type provisions in your power of attorney for personal care such as specific wishes regarding life-sustaining measures