Power of attorney.
The term may sound complex, onerous and even a little bit scary.
But it shouldn’t, says James Steele, who practices in disputes involving powers of attorney, with Saskatoon’s Robertson Stromberg LLP.
If you are trying to decide who to name as your POA (power of attorney), or have had the responsibility bestowed on you, there are some things to consider to make it less daunting.
First of all, what exactly is a POA?
“Like a will, people don’t always consider a power of attorney. But you should have one,” Steele says, explaining that an event like an accident, dementia or ill health could require someone to handle your affairs. A power of attorney is a legal document to give someone else the authority to act for you. If you don’t have a POA when you lose capacity, an expensive guardianship court application may be required.
“A POA is really helpful if you lose capacity and have a loved family member who can come and do the banking, bill-paying, and look over your day-to-day needs,” Steele says. “But a POA is also a very powerful, blank cheque, since it can give that person the power over personal or property decisions.
“If you grant POA to someone who doesn’t turn out to be trustworthy, that person can, in theory, go to your bank account and take your money out, and do things in your name you didn’t have the intention of doing.”
Steele has litigated various cases in which a power of attorney has been misused, and where court assistance was necessary to provide compensation.
If a POA misuses this power, the law offers some legal protections. First, the appropriate person can demand the attorney to provide an accounting. This accounting will require the attorney to list everything they have done with the property they handled. It will let you see where the money went.
If you find out that the attorney has wrongly abused their power, a court action may be required to try to recover the money. Steele recommends that you consult a lawyer if this is the case.
There are other safeguards in the law. For instance, without court approval a POA cannot make gifts to themselves, out of the property they handle under the POA. Gifts to others are very limited as well.
You can benefit from having a power of attorney to manage your financial affairs if you lose capacity. Take care to appoint someone who is trustworthy. Also, tell your family who you have named as POA. Having this discussion can ensure there are no later questions, when you no longer have capacity to answer them.
The above is for general information only. Parties should always seek legal advice prior to taking action in specific situations.