What is a Power of Attorney?
A Power of Attorney is a document in which one person, called the "Donor", gives another person, called the "Attorney", the power to manage some or all of the Donor's financial affairs.
In this context,
Attorney means substitute decision-maker, not lawyer. You can appoint any adult who is willing to accept the appointment to be your Attorney.
What is an Enduring Power of Attorney (EPA)?
A non-enduring Power of Attorney terminates if the Donor loses the capacity to make financial decisions.
However, if the Power of Attorney contains certain words prescribed in the
Powers of Attorney Act, it will remain in effect after the Donor loses capacity.
In other words, it
endures notwithstanding the Donor's lack of capacity.
What is a springing EPA?
A springing EPA is one that doesn't come into effect until after the Donor loses capacity. The Donor maintains control of their finances while competent, but the Power of Attorney is in place in case they become incompetent.
A springing EPA comes into effect when a Certificate of Incapacity form is signed. You state in your EPA who must sign the Certificate of Incapacity to bring it into effect. Most people require some combination of their Attorney, after consulting with a physician or psychologist, plus one or two doctors.
The vast majority of the EPAs we prepare at Turning Point Law are springing EPAs.
What powers does an Attorney usually have?
Most Donors give their Attorney very broad powers to take complete control of all aspects of their financial affairs, including taking control of financial institution and investment accounts, managing and selling real estate, collecting money owed, paying debts and expenses and supporting their family.
However, you can restrict the powers you give your Attorney. For example, you could restrict your Attorney's ability to dispose of a particular asset because you want it to make sure it is preserved for the beneficiaries under your Will.
Can my Attorney change my Will?
No, an Attorney cannot be given the power to change the Donor's Will.
However, an Attorney who is not aware of what the Donor's Will says could inadvertently dispose of something the Donor wants to go to a specific person, so Turning Point Law EPAs contain a clause giving the Attorney the right to see the Donor's Will (but only after the EPA has come into effect).
What standard will my Attorney be held to?
While you are competent, your Attorney is required to faithfully follow your instructions, even if they believe your instructions are not in your best interests.
If you become incompetent, your Attorney will be a fiduciary agent and must act honestly and in your best interests. Your Attorney must use your assets only for your benefit and must not commingle their money and yours.
What qualities should I look for in the person I appoint as my Attorney?
The two most common patterns for the appointment of Attorneys we see are:
1. a married Donor appoints their spouse as their primary Attorney and one of their children as an alternate, and
2. a single Donor appoints one of their children as their primary Attorney, with another child as an alternate.
Whoever you appoint, you want someone you trust, who is willing to do the job, who has the skills and knowledge to be able to manage your money and other financial affairs, and who is familiar with your values around money and property.
You should talk to the person you want to be your Attorney so the appointment won't come as a surprise. You should also discuss your assets and liabilities so they can step into your shoes if and when the time arrives.
Is my Attorney required to account?
Yes. The duty to account is a fundamental obligation of a fiduciary.
If you recover your capacity, you can require an accounting.
While you are incapacitated, the court can order an accounting if one is requested by an interested party.
After you die, your Personal Representative can require an accounting.
Is my Attorney required or allowed to disclose my financial affairs to anyone?
At Turning Point Law, we have found that much of the family conflict around EPAs results from Attorneys not sharing information with their siblings.
We therefore recommend an EPA clause that requires an Attorney other than the Donor's spouse to disclose certain information to the Donor's children.
Can I change my mind?
Yes, as long as you have capacity, you can change or revoke your EPA.
However, you can't change or revoke your EPA if you lack capacity.
What if I recover my capacity
If you recover your capacity, your EPA will remain in effect, but you will recover the power to change or revoke it. You will also recover the right to compel the Attorney to account.
Where should I keep my EPA?
You should keep your EPA with your other valuable legal papers, such as your Will.
Make sure your Attorney knows where it is. If you put it in a safe or a safety deposit box at a bank, make sure your Attorney will be able to access it.
What happens if an Attorney misbehaves?
There is no government agency that supervises the conduct of Attorneys.
If your Attorney misbehaves, any interested person can ask the court to remove the Attorney and appoint a trustee of your assets.
The court can also order the Attorney to prepare an accounting. If the Attorney can't account for all your assets, they can be held personally liable for the shortfall.
What is the Turning Point Law process regarding EPAs?
We will guide you through a confidential discussion of the issues involved in making your EPA, then draft an individualized document with language that we have developed to prevent problems we have seen in other cases.
Is my Attorney entitled to compensation?
It's depends on what you put into your EPA. If you say nothing about compensation, your Attorney will be entitled to a reasonable payment for their time and effort, plus out-of-pocket expenses.
Why do I need an EPA?
With an Enduring Power of Attorney, you can make decisions now to protect your assets, eliminate stress on you and your loved ones, and give you the peace of mind of knowing that a plan is in place if you are unable to take care of your money and property yourself.
An Enduring Power of Attorney can also mean your family won’t have to go through the stress and expense of having to go to court to have your declared incompetent.
The most common reasons for creating a Power of Attorney are:
1. To facilitate financial and property transactions that need to be completed if you are away from Alberta for an extended period.
2. To ensure that your financial affairs are properly administered in the event of an unexpected illness or injury.
3. To ensure that your financial affairs are properly administered as you age and become unable to manage them yourself.