Did you know that your banking agreement probably gives your bank the right to refuse to allow your Attorney to close a bank account or transfer funds out of your bank account if the bank does not believe that your Attorney is acting in your best interests? For some people, this will come as a relief, for others as a source of frustration.
It is a good idea to choose someone you trust to assist you with managing your financial affairs when you are unable to. A document used for that purpose is called a Power of Attorney for Property. The person appointed to manage your financial affairs is called your Attorney. If the Power of Attorney is intended to be effective, that is to continue, in the event of your incapacity, the Power of Attorney will need special wording and is called a Continuing Power of Attorney – in Ontario at least. Some other jurisdictions may use different names for the document.
Many couples, for example, appoint each other as an Attorney for property. In cases where a couple treats their finances as shared, it may not be the intention of the couple to limit in anyway the ability of the other to manage funds in the name of the other member of the couple. If you want your Attorney, who may be your spouse for example, to be able to withdraw funds from a bank account to put all of the money into his or her account, then it will be important to include special wording to permit that. If you do not want your Attorney to be able to withdraw money for anything other than payment of expenses for which proof of payment can be provided (like a hydro bill), probably your banking agreement will protect you. To be certain though, you can provide special wording for that in your Power of Attorney.
Powers of Attorney for Property generally allow the Attorney or Attorneys named in the document to do anything the donor (the person who makes the Power of Attorney for Property) could do if capable, except make a will. That means they are powerful documents that can be abused. In some cases children have used them to transfer a parent’s home into their own names. They have been used by caregivers to drain bank accounts. They are also often used properly to help a donor manage his or her finances when the donor is in need of that help. This can include acting for the donor while the donor is still capable if the donor wishes that and the document is properly set up for that. It can be usable only while the donor is incapable with respect to property if the document is set up for that purpose. It can be limited to a single purpose – like executing closing documents on the sale of your house while you are out of the country. There are many ways that a Power of Attorney for Property can be set up.
It is important to make your Power of Attorney for Property while you are capable with respect to Property since they are not valid otherwise. It is important to choose your Attorney carefully and to consider what it is that you trust your Attorney to do and under what circumstances to ensure that your Power of Attorney for Property works for you. If you limit what your Attorney can do, that may protect you from abuse, but, it may also prevent an honest and trusted Attorney from being able to manage your finances for you and for your beneficiaries – one of whom may be your Attorney – in the most efficient and sensible way.
So, what makes an effective Power of Attorney for Property? Probably the most important thing is having someone you trust to be your Attorney and the next most important thing is know what you want your Attorney to be able to do and then having a knowledgeable and experienced lawyer help you to prepare one that will be prepared in a way that properly addresses your needs. Something a little more specialized may cost a little more, but, might also be much more useful to you in insuring that your finances are managed in the way you would have managed them if you were able to do so yourself.
The article posted here is for general information. We hope you find it useful. For advice specific to your circumstances you should consult a lawyer. We would be pleased to speak with you if you have questions about our services or need the assistance of a lawyer.