Need to choose a Power of Attorney in BC but you don’t have a clue what a power of attorney is and how to choose one? Here are some simple tips to do so.

Understanding the concept of Power of Attorney (PoA) can be a complex task, particularly as rules and regulations often vary depending on one’s geographical location. In this case, we’re looking specifically at British Columbia (BC), a province in Canada with its unique take on PoA.

In simple terms, Power of Attorney is a legal document that enables an individual, the “donor”, to appoint another person or organization, known as the “attorney”, to make decisions on their behalf. These decisions might pertain to financial matters, personal care, or health-related concerns.

Establishing PoA is often a prudent step for those who anticipate a future where they might not be capable of managing their affairs, possibly due to advanced age, mental health conditions, or severe physical impairment.

Power of Attorney Act

In BC, the Power of Attorney Act regulates these appointments. It specifies two types of PoA: general and enduring. A General Power of Attorney gives the appointed individual or organization the ability to handle the donor’s financial and legal matters, but this authority terminates if the donor becomes mentally incapable. On the other hand, an Enduring Power of Attorney is designed to endure or come into effect if the donor becomes mentally incapacitated.

What makes an Enduring Power of Attorney particularly interesting is its aspect of durability. Unlike a General PoA, an Enduring PoA remains valid and operational even if the donor is unable to make sound decisions or provide instructions due to mental incapacity. This kind of PoA is often established to plan for situations where a person fears they may lose their mental competence due to a progressive medical condition like Alzheimer’s disease.

To establish a valid Power of Attorney in BC, certain requirements must be met. Firstly, the donor must be at least 19 years old and capable of understanding the nature and consequences of the PoA. This means they should comprehend the authority they are granting to the attorney and the possible effects of their decision. The attorney must also be at least 19 years old, must be mentally capable, and not be bankrupt.

The role of the “attorney” is crucial

Understanding the role of the attorney is crucial. The person designated as the attorney has a fiduciary duty to act in the best interest of the donor. They must handle the donor’s affairs with honesty and integrity, maintaining a high standard of care. If the attorney fails to meet these standards, they can be held legally accountable.

It’s also important to note that the donor can revoke a Power of Attorney at any time, as long as they’re mentally competent. This is an essential safeguard that protects the donor’s interests. They can reassess their appointed attorney as necessary, ensuring they still trust and are comfortable with them managing their affairs.

However, there are some restrictions on what an attorney can do. For instance, they cannot change the donor’s will or other testamentary dispositions. They are also barred from transferring the donor’s assets to themselves unless the PoA document specifically allows it.

Power of Attorney in BC

Understanding the Power of Attorney in BC requires familiarizing oneself with the laws and regulations outlined in the Power of Attorney Act. It involves understanding the two types of PoA—general and enduring—and knowing the requirements for establishing each.

Recognizing the role and duties of the attorney, as well as the rights and protections afforded to the donor, is also fundamental. Power of Attorney is a powerful tool for managing one’s affairs when they’re no longer capable of doing so, offering peace of mind in uncertain times.

We work all our lives to amass enough wealth so that we can spend our life the way we always wanted to. But there might come a time in your life when you might become unable to do so.

You will need someone trustworthy

And in that moment of despair, you will need someone trustworthy who can look after both you and your hard-earned wealth.

Someone who can become your power of attorney and make important decisions on your behalf if you become unable to do so. You might wonder what is a power of attorney.

A power of attorney (POA) is a legal document that enables you to designate another person to act on your behalf. That person is called the agent or attorney-in-fact, and you’ll be known as the principal.

This document gives the authority to the agent to make limited and broader decisions. Like decisions about your property, finances, or healthcare, depending on the terms you have agreed upon.

After reading up to now you might be thinking that things are getting too technical for your liking. If that’s the case, don’t worry. I’m here for you.

Keep reading to get a better and simpler understanding of power of attorney and how you can choose the perfect candidate for yours.

How a power of attorney actually works

Any adult might need a POA for certain reasons. They will make financial decisions for you if you are incapacitated, but that is not the only reason someone might need a POA.

It is also important for people who work overseas so they can be assured that their finances are being handled while they’re away. Young people who tend to travel a lot might also set up a POA to handle their financial affairs, especially those who aren’t married.

However, POAs in BC are generally established by elderly people who are facing something serious which is stopping them from making their own financial and health decisions, or by people who are facing long-term health crises.

Let’s assume that for some unfortunate reason, you have become physically and mentally unable to act on your own.

Then for your own well-being, your agent or attorney-in-fact will be called upon to make your financial decisions.

For example, if you are seriously ill and unable to pay your own medical bills, they will deal with it, and if necessary, they will make arrangements to sell your assets to do so.

There are other important tasks that POA enables the agent to carry out, such as taking care of bank transactions, making real estate decisions, handling your correspondence with the government, or making sure that you`re getting your retirement benefits.

Types of Power of Attorneys In BC

There are many types of power of attorney according to the responsibilities you vest on your agent or attorney-in-fact. Here are some of the important ones.

Conventional power of attorney

This POA is considered in motion the moment it is signed, and it stays in motion until you become mentally and physically fit to make your own decisions.

It is essential in these sorts of POAs in BC to state how much authority you’re giving your agent in case you’re incapacitated.

This is also known as “limited power of attorney” and is one of the most common ones. It is often used for what is called discretionary money management, enabling managers to buy and sell on behalf of their client, including making the decisions of what to buy and what to sell.

That’s why it is also called “general power of attorney.”

A durable power of attorney

This type of POA also comes into effect as soon as it is signed. But it stays in effect for a lifetime unless you initiate a cancellation.

But you’ll have to specify in the document that your agent’s authority should stay in effect even if you’re incapacitated. Nowadays, durable POAs are becoming popular because it enables the agent to act much more freely.

Springing power of attorney

This sort of POA is used for only specific events, for which the agent should be specially trained.

What are the things you should consider while choosing your power of attorney?

Now that we have established the importance of POA, it has become clear that you need to be very careful while choosing your POA. Here are some essential things you should consider in making this decision:

Can you trust them?

While deciding who will be your POA, the first and most important question you’ll need to ask yourself is whether you trust that person.

You need to trust that person to carry out your wishes if you become unable to do so, so you have to be confident that they have only your best interest at heart.

Their age

While selecting a power of attorney, avoid choosing someone who is much older than you, since they might die before you need them.

You should also avoid choosing someone who is much younger than you because they might lack the experience to make important decisions on your behalf.

Their qualifications

Qualification is a thing you should definitely consider while choosing your power of attorney. You need to choose a person who has enough intellectual capacity and business acumen to manage your finances.

Also, that person should have sound judgment so that they will make good decisions when it comes to their healthcare needs. You might choose someone that you feel you can trust blindly.

But if that person doesn’t have the proper qualification to handle your finances or healthcare, then they are useless. They might have your best interest at heart but make wrong decisions that will cause you trouble.

How will the person affect your family dynamics?

Another important thing you need to consider is your particular family dynamics. If your family members or children don’t tend to agree, you should appoint a neutral third party as your power of attorney.

That will lessen infighting and make the process run smoother.

Since a BC power of attorney has the authority to make a lot of important decisions for you, it is imperative that you think carefully about whom you choose to perform this very important function.

This article should help you evaluate and select the best person for the job.