POWER OF ATTORNEY

Matters related to Powers of Attorney are governed by the Powers of Attorney Act, RSA 2000, Ch. P- 20 and its regulations. In Alberta, you must be at least 18 years old to make a Power of Attorney. In addition, you must understand the nature and effect of a Power of Attorney at the time of signing. If you were not mentally capable of understanding this at the time of signing, the Power would be void.

A Power of Attorney is a written, signed, dated and witnessed document that gives someone else the right, while you are still alive, to act on your behalf with respect to your financial affairs, including debts. This can include paying bills, depositing and investing money on your behalf, and even selling your house.

A Power of Attorney may be for a specific act or for a pre-determined amount of time, or it may be general in nature. You are the "donor," and you give your authority ("Power") to another person ("Attorney") to deal with your financial affairs.

Many people believe that if something happens and they cannot make decisions for themselves, their family can do so for them, which is not necessarily true. For financial decisions, legal authority is needed, and you can give this authority by naming someone in a Power of Attorney.

It would be best if you had a Power of Attorney because an accident or illness could make you incapable of deciding things for yourself (this is called mental incapacity or infirmity). In it, you authorize someone to act for you and your best interests in conducting your financial and property matters.

You may also wish to consider making a Power of Attorney for periods that you will be away for an extended period. This enables your financial affairs to be run smoothly in your absence.

By preparing a Power of Attorney now, you can ensure that your property is managed by someone who knows you and what you want, someone you trust to act in your best interests when you cannot make decisions for yourself. It is a simple and inexpensive way to plan ahead.

If you do not prepare a Power of Attorney, you do not get to choose who will look after your financial affairs. In the case of future mental incapacity, this means that someone will have to apply under the Adult Guardianship and Trusteeship Act to become a "trustee" of property (this is called a "Trusteeship" application). In general, the government does not step in to help – it acts only in situations where no other suitable person is available, able and willing. This court process can be lengthy (it can take several months) and costly. It can result in disagreements among your family members and friends and give authority to someone you might not have chosen.

Some banks have their own Power of Attorney forms, and these banks may ask that you use their forms instead. A bank's Power of Attorney allows the person named to manage your assets deposited with that bank, but only that bank.

You should think carefully before you sign these forms. The bank's form will only cover your bank accounts and investments with that institution and not any of your other assets. Depending on what it says, signing it could also cause a previous Power of Attorney you have drafted to be revoked, leaving you with no one able to handle your other affairs if needed. In addition, the more Powers of Attorney you make, the more documents you need to update and/or revoke, as appropriate – this can become time-consuming and burdensome.

Some of the risks of a Power of Attorney may be that it may be to narrow and not accomplish what you need, you may give Power of Attorney to someone who does not follow your wishes and takes advantage of your situation, the person you give Power of Attorney to may not have a good understanding of what you need or want to be done or may not know how to manage your assets and finances. 

When picking an attorney, several other factors come into play. For example, is that person reliable, does that person have the experience to deal with your specific asset(s) properly, will this person agree to act on your behalf now and in the future. Do you anticipate that, when needed, your attorney will have the time to act, and lastly: does the person named in your Power of Attorney know what you want them to do on your behalf?

It is essential to revoke your Power of Attorney when you no longer need the attorney to act for you. 

A Power of Attorney does not give authority to make decisions about your health care – for that, and you need a separate document, called a Personal Directive.

This is general information only, not legal advice. Don't hesitate to contact our experienced team at Valley Law Chambers to help you meet statutory requirements and help you understand and choose the right kind of Power of Attorney for your situation to protect you and your loved ones.