Personal planning goes beyond the financial planning, saving for the future, or preparing for retirement. People must plan for their future and arrange their things and assets in the way they want them to be managed if they can no longer make the decisions on their own.
In Ontario, a Power of Attorney or POA is simply a legal instrument that grants a person of your choice to act on your behalf when you cannot.
A Power of Attorney is a legal instrument in which you (the “Grantor”) appoint another person the “Attorney” to act on your behalf. It may regard individual decisions about grooming and dressing, or more formal financial or legal issues. The “attorney” does not necessarily have to be a lawyer although this is advisable and must be a trusted family member or friend in case you are incapacitated to make decisions for yourself.
In Ontario, there are four main types of Power of Attorney
Let’s take a closer look at each type and their importance.
A Continuing Power of the Attorney for Property is when you allow another person to deal with your financial and property matters, even when you are unable to do so because of mental incapacity. The word “continuing” signifies that the power shall subsist after you loses your capacity to manage your affairs.
A major benefit of this type of POA is that it continues to remain effective even when the person grants the power turns insane. This means that the person you’ve appointed will having control of your financial affairs hence will not require any court intervention or guardianship arrangements.
This type of POA is typically invoked in cases where the grantor has been diagnosed with a degenerative illness like Alzheimer’s, or after a sudden medical event like a stroke. However, it’s important to specify in your POA document when and how the authority can be invoked.
The Non-Continuing POA for Property is similar to the continuing POA for property, but it does not remain valid if you become incapable mentally. This type of POA is typically used for short-term situations and for specific financial tasks.
A non-continuing POA is often used when you need someone to manage your financial affairs for a limited period, such as if you are traveling, hospitalized for a short time, or temporarily unable to manage your property for some other reason. Unlike the continuing POA, it becomes void if you are deemed mentally incapable.
A Power of Attorney for Personal Care is a document that gives someone the authority to make decisions about your health care, medical treatment, and overall personal well-being if you are unable to make these decisions yourself.
This type of POA becomes essential when you are no longer able to make decisions about your health or personal care, often due to mental incapacity. It is typically invoked when someone is diagnosed with a serious illness, suffers a debilitating injury, or experiences age-related cognitive decline. The attorney is expected to act in your best interest and follow any specific instructions you’ve outlined.
Choosing the right person to hold a Power of Attorney for Personal Care is critical. This individual should have a deep understanding of your personal values, health care preferences, and desires related to end-of-life care. It’s common to appoint a close family member or a trusted friend who can navigate emotionally charged situations and make decisions in your best interests.
A Limited or Specific Power of Attorney grants someone authority to handle a specific task or decision on your behalf. Unlike the other types of POAs, this type is more restricted in scope and duration.
A limited POA is often used in situations where you need help with a one-time transaction or a specific event. For example, if you are traveling abroad and need someone to manage a property sale while you’re away, you might grant them a limited POA to handle just that transaction. Once the task is completed, the authority is automatically revoked.
The limited or specific POA allows you to give someone authority over just one aspect of your affairs without granting them sweeping control over your finances or personal matters. This can be useful for individuals who need help with only one particular situation but do not want to give someone broader powers.
For any Power of Attorney document to be valid in Ontario, it must meet specific legal requirements:
Additionally, it is recommended that you seek legal advice to ensure the document is properly executed and reflects your intentions accurately.
In Ontario, a Power of Attorney is an essential tool for ensuring that your affairs are managed according to your wishes in the event that you are unable to do so yourself. Whether you need someone to handle your financial matters, make critical healthcare decisions, or take care of a specific task, understanding the four types of Power of Attorney — Continuing POA for Property, Non-Continuing POA for Property, POA for Personal Care, and Limited POA — is key to making the right choice.
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