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Why You Need Powers Of Attorney
Estate Planning 101

Why You Need Powers of Attorney

Along with your Will, powers of attorney (POA) make up the cornerstone documents in your estate plan.

Along with your Will, powers of attorney (POA) make up the cornerstone documents in your estate plan. Essentially, a POA is meant to protect you while you’re alive, while a Will is meant to honour your wishes after your passing. 

It’s common to think that we all have tons of time to get our affairs in order and we won’t need to worry about deciding who will act for us when we’re elderly and need the help. But, the sad reality is that incapacity can happen at any time. And one of the best ways to protect yourself is through well-documented POAs. 

There are two basic types of POAs

  • A POA for personal care allows you to plan for your own care needs

  • A POA for property helps to ensure that your property is protected 

A note on terminology — a power of attorney is the name of the document, an attorney is the person you appoint in the document to act for you. Each province has the same two types of POAs, but the names of these documents may be different from province to province.

If you don’t have these documents in place

Without a POA for care, a relative may be asked to make care decisions on your behalf, and it may not be the relative you’d want to make these decisions for you! Even if that’s not the case, your wishes for your care may still not be met if you haven’t made them known and documented them. This includes things like receiving care in your own home verses a care facility, what care facility you end up in (is it in your community?) and the level of care you would want offered in the care facility. 

Should you become incapable of managing your property and not have a POA for property in place, your accounts may be frozen and important decisions about your property (including funding the care that you want) may go unmade until a court-appointed guardian is put in place.

If this happens, it can be a costly and time-consuming process at a time when you need an advocate the most—not to mention, you’re also at a heightened risk for financial abuse. 

Who will act for you? 

A power of attorney for property is a powerful document.  It empowers the attorney to deal with your property at the time you are most vulnerable. So, it is important to choose someone who you trust to be scrupulously honest and to act in your best interests. The right attorney should also have the following qualities: 

  • Live close by

  • Possess good judgement

  • Be capable of remaining emotionally neutral

  • Have financial acumen

  • Be prepared to learn what is legally expected of them

You can appoint the same or different people to the roles of attorney for property and for personal care.  These roles intersect so when appointing different people to the roles, your attorneys will need to cooperate.  For example, they’ll need to work together to determine where you’ll live and the associated costs.  A word of caution: The more attorneys you have, there is the increased likelihood for feuds and disputes, which could lead to severed relationships between the attorneys and potential conflicts when making important decisions.

For those who don’t have a suitable family member/friend to take on the POA for property role, or who don’t want to put this responsibility on their loved ones, there are options. Professionals, such as a trust company, can be appointed directly in your POA for property and have services to help your attorney while they are acting. (Some choose this option so their family can focus on their care without being burdened by the extra responsibility of managing property).  

You may live with incapacity for many years and, as such, your attorney(s)—or court appointed guardians — and you, may be taking on a long-term commitment. Taking the time to create your POAs and appointing the right attorney for your circumstances, can help protect you, your property and the people you care for.

RBC Royal Trust and RBC Wealth Management are business segments of the Royal Bank of Canada. Please click this link rbc.com/legal for further information on the entities that are member companies of RBC Wealth Management. The Companies and the Royal Bank of Canada do not endorse or recommend any information, content or services offered on any third party website. The content in this publication is provided for general information only and is not intended to provide any advice or endorse/recommend the content contained in the publication. ®/TM Trademark(s) of Royal Bank of Canada. RBC and Royal Trust are registered trademarks of Royal Bank of Canada. Used under license. © Royal Bank of Canada 2023. All rights reserved.

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