Accidents are called accidents for a reason; nobody plans on becoming seriously injured or incapacitated. Having a plan for when the unthinkable happens should include having a Power of Attorney for property.
A “Power of Attorney” is a person who is chosen by someone to act on their behalf in the event they are incapable. To appoint a person a “Power of Attorney” you must have a valid document that is witnessed by two independent witnesses (e.g. not the person being named as attorney) who were present with the grantor at the time of signing. The process generally involves a meeting with a lawyer who will tailor the document to your needs, check that the grantor has capacity to direct and sign the document and validate the grantors ID. These documents are often drafted alongside a last will and testament. Why are they important to have even if you do not have a full estate plan and will? Because the unexpected can happen at any time.
We have had cases where a person riding a bicycle or walking along the street has suffered a serious traumatic brain injury after being hit by a car. Although the person may look fine from the outside, a serious traumatic brain injury is life changing. After a formal capacity assessment, the person may not be able to manage their finances. This means that when a case settles, a person may not be able to access their money without a Power of Attorney for property. If you do not have a Power of Attorney for property that you chose while you were capable (able to), the government gets involved…we will not discuss the potential difficulty with this here but you are warned!
Powers of Attorney (POA’s) come in two primary varieties; those that govern property and those that govern healthcare decisions. This blog post will discuss Powers of Attorney for Property.
A power of attorney for property gives another person the ability to access, manage and control all of someone’s property – this includes real estate, bank accounts and investments.
The most common form is called a Continuing Power of Attorney for Property (CPOAP). “Continuing” in this context means that it comes into effect immediately upon signing which makes it essential that you choose someone you trust to uphold the duties and responsibilities associated with the granting of the power. A POA with immediate effect, despite the potential risk, is still preferable to one with conditions because conditions like “incapacity” require specialized medical assessments which are not covered by OHIP and can take several months to obtain – or they require the intervention of the courts which is also expensive and time consuming. As such it is generally recommended to have a CPOAP, kept in a safe place (not a safety deposit box) that the person who will be your “attorney” knows how to access in case of emergency.
Most people think of a POA primarily in the context of elderly parents who need help with managing their financial affairs. But a continuing power of attorney for property can be extremely important for younger people who may unexpectedly become incapacitated or seriously injured. Having someone ready and able to fully manage your financial affairs while you are in the hospital can be an integral part of your ability to recover.
For a young person the “attorney” should be someone like a parent, trusted friend, spouse, or long-term partner. While these people are usually deferred to for healthcare decisions in an emergency, they will not necessarily have the same automatic right to make decisions regarding financial assets and personal property. Unless these people are already listed as full joint asset holders on all of your assets they will need a CPOAP to be able to do things like access your bank account and pay your rent while you’re in hospital.
Even married spouses can run into issues if a family business, and all associated bank accounts are not jointly owned, or if changes need to be made to the financing of a matrimonial home when one spouse is incapacitated to the extent that they cannot consent to the process.
At Lamont Law, we now offer the professional service of assisting with the paperwork to appoint a Power of Attorney (for medical and property).
Call us today for our pricelist. If you reference this blog post, we will offer a 10% discount!