Powers of attorney are important legal documents that every Canadian should have on file. A power of attorney assigns special authority to a trusted individual who can make decisions on behalf of the power of attorney holder in the event the person becomes incapacitated.
Having this document on file makes things immeasurably easier on loved ones who may need to step in to make important medical and financial decisions at a moment’s notice when they’re needed most. However, powers of attorney also come with risks that estate planners should be aware of.
A power of attorney becomes dangerous when the person selected to carry it out is untrustworthy, abuses his or her authority, or makes decisions that are not in the best interest of the person who set up the power of attorney. Powers of attorney can also be problematic if they are too narrow or too broad regarding the powers they give. For example, if a power of attorney does not leave specific instructions on how assets should be handled, it could lead to them being handled in an unwanted manner. Conversely, if the scope of the powers is too narrow, the representative may not be able to act appropriately on behalf of the individual being cared for.
Another danger involves the appointment of multiple powers of attorney. This joint status could lead to disagreements and standstills, which could result in costly delays. Finally, failing to regularly review and update a power of attorney could be devastating. Life circumstances and laws change, which can render a power of attorney obsolete unless it is revised and updated.
At Garton & Harris creating powers of attorney and planning estates is our business. We help British Columbia residents prepare themselves and their families for the future in a way that avoids risks and common pitfalls associated with planning estates.