Many people understand the importance of naming someone to take care of affairs after they pass away. But, what if an individual is still alive but unable to make decisions? In these cases, having a power of attorney named in accordance with British Columbia estate law can make a significant difference. Setting up a power of attorney can be quite easy, and is often done as part of the overall estate planning process.

Issues of incapacity, guardianship and powers of attorney often come up when someone visits a lawyer to draft a will or prepare a trust. Ideally, advice on all these issues comes from someone who is local, specialized in this field, and understands provincial estate law. The attorney will be able to explain the different types of powers of attorney, and the steps which can be taken to prevent abuse of this critical role later on.

There are two types of powers of attorney: limited and general. Limited is named when there is a particular task for which someone wishes to designate another to undertake; for example, signing off on a property sale when they are out of town. A general power of attorney provides a much larger scope of rights and responsibilities. In both cases, but particularly for general power of attorney, picking the right person or people for this role is critical.

When setting up a power of attorney, your British Columbia lawyer will ask if you want a separate person responsible for medical decisions and financial decisions. This is typically the best practice, particularly if there is no spouse involved. Issues like this are important to explore with a lawyer to find the best option and ensure paperwork is properly completed.

Many people are aware that they need to name certain individuals to care for themselves and their property should they become incapacitated or pass away. What they may not quite understand is that these two scenarios actually require different types of planning and the naming of distinct types of caretakers. Knowing the difference between a power of attorney and and executor is critical for British Columbia families seeking to plan for the future.

Power of attorney gives an individual or individuals the right to act on a person’s behalf if that individual is unable to do so. People often will name one power of attorney for health and care, and another for finances. These jobs can both be done by the same person, or in some cases, co-powers of attorney are named as a check and balance for important decisions.

Importantly, a power of attorney is only able to act on someone’s behalf while the person granting the power is still alive; once the individual passes away, a will takes over and the named executor is given these responsibilities. This typically includes making funeral arrangements, deciding on burial or cremation, and dividing property. These decisions can be clarified in an individual’s will, or can be left to the executor for the final decision.

There are other reasons a power of attorney (POA) may be revoked besides death. This includes the person who named the POA entering bankruptcy or a court decision to have an administer handle affairs. Those who have questions or concerns about POA issues in their family should reach out to a British Columbia lawyer for answers and options.

When families get together, estate plans are probably the last thing most people want to discuss. It can be an emotional topic for many, and can feel quite morbid to raise during the usual holiday get-togethers. However, it is important that British Columbia individuals start these conversations with their families, so those who are named as power of attorney or executor have clarity on what is to come.

For some people, it is easier to approach these issues organically, when they naturally come up in conversation. This typically involves breaking the conversation into smaller topics and raising them when the time feels right. This works well for families who speak fairly often and candidly.

Topics that will need to be addressed varied. Medical conversations are very important, as they help a power of attorney to know how to respond in different situations according to one’s wishes. Financial plans, roles and responsibilities, and insurance are also worth discussing.

While not every person needs to be part of every discussion, it does help for messages to be consistent and clear to all children and loved ones. This will help to prevent conflict down the line, and ensure those named power of attorney are supported in even the most difficult decisions they must make. Clarifying plans and showing the legal paperwork to all involved can help clear up any ambiguity. A British Columbia estate planning lawyer can help with the creation of these documents, as well as advising on the type of planning needed to prepare for the future.

Individuals who choose someone to act on their behalf want to avoid potential horror stories at all costs. British Columbia residents who are choosing someone to act on a power of attorney should be mindful of what it takes to do the job. One of the issues they could come up against is whether a bank will trust that individual since it is incumbent upon banks to safeguard people’s finances.

Banks have the power to reject a power of attorney. They may do this for several reasons including if the document is outdated, if the document isn’t clear or if the document doesn’t conform to the bank’s policies. Banks have also refused a power of attorney because they had never met the person acting on it, the person with the bank account didn’t sign internal bank document or a parent wasn’t able to physically get to the bank to notify the institution that he or she had authorized a child to act on a power of attorney.

If a bank does refuse a power of attorney, there are a few things a person can do. Getting in touch with a lawyer is the first wise idea. Calling the local ombudsman might be another. There is an Ombudsman for banking services and investments in various areas of the province.

When there are problems with banks and a power of attorney, a British Columbia lawyer may be able to step in and mitigate the issue(s). There may be a simple solution with which a lawyer may be able to help such as an issue of capacity. A lawyer may be able to intervene before the issue escalates.  

Canadians who choose someone to act on their behalf financially when they can no longer do so need to make the choice wisely. In choosing a person to act on a power of attorney, British Columbia residents will want to make sure the person is trustworthy and has some financial common sense. Fraud is a reality in some situations, so it’s important to give this power wisely.

When it comes to banking institutions, they want to know if a person acting on another’s behalf has the authority to do so. Powers of attorney can actually be refused by banks if documents presented are out of date, aren’t clear or don’t conform to banking policies. So, these documents must be kept up to date. Experts say when it comes to a power of attorney, banks should operate on a balance of caution and common sense.

When powers of attorney are rejected, significant problems can ensue, leaving a testator’s affairs in limbo. Even though banks may fear fraud in some instances, there should be real and definitive reasons for not accepting a power of attorney. Most of these issues can be thwarted by testators and family members and having a power of attorney drawn up at an age when the testator’s mental capacity is not likely to be in question.

A British Columbia lawyer can assist a client in drawing up a power of attorney early on during estate planning. In this case, a lawyer would have time to fix any issues with the document that may arise at financial institutions. With a power of attorney drawn up earlier in a client’s life, there is less likely to be pushback from financial institutions.