Don Archi's Law Blog
Powers of Attorney for Property
When most people think of estate planning, they think only of making a Will, which deals with the orderly transfer of your assets once you die. Equally important is preparing and signing Powers of Attorney to deal with your assets and/or your well-being if you become incapable of making decisions on your own behalf (which most people refer to as being mentally incompetent).
There are two types of Powers of Attorney available in Ontario: A Power of Attorney for Property and a Power of Attorney for Personal Care.
In this blog, I will deal with the basics of the Power of Attorney for Property (POAP).
A POAP is a document wherein you (the “Grantor”) appoint or name someone as your substitute decision maker (the “Attorney”) who will make decisions for you to manage your financial affairs and property when you are unable to do so.
Who should you appoint? You can name one or more people (or even a trust company, if circumstances warrant) to act on your behalf. It is important that you appoint someone who is trustworthy (above all) as well as organized and capable of managing your property and finances for you. Most people select family members or friends.
A properly drafted document should include a paragraph to make it “continuing” or “enduring” so that it will remain effective if you become mentally incapable. This will stop the Province of Ontario from stepping in to administer your assets.
I cannot emphasize enough that the cost of having a professionally prepared POAP is minimal when compared to the cost of not having one if needed. For example, if you become mentally incapable (due to a car accident or due to Alzheimer’s Disease) and your house has to be sold because you have to move into a chronic facility, a family member (and not necessarily one your would have chosen) will likely have to obtain a court order. The cost of obtaining a court order is substantial.
Most POAP’s are general in nature and are effective immediately upon signing. The document can be drafted for specific purposes (or for a specific period of time). For example, you may prepare one to deal with the sale of a specific piece of property and which expires at the end of the year.
The POAP automatically terminates upon your death or when specifically revoked (cancelled) in writing.
In my next blog, I will deal with Powers of Attorney for Personal Care.
If you have any suggestions for future blog topics, please send your suggestion to me at email@example.com.
|Friday, February 18, 2011