Power of Attorney: What They Are and Why They Matter
What Are They?
Powers of Attorney (POAs) are legal documents that give individuals you trust the authority to act on your behalf if you're no longer able to make decisions yourself. In Ontario, there are two essential types:
- Power of Attorney for Property: Authorizes someone to manage your financial affairs—paying bills, overseeing investments, managing bank accounts, or dealing with real estate and other property.
- Power of Attorney for Personal Care: Authorizes someone to make personal and health-related decisions on your behalf, including medical treatment, housing, and day-to-day care, if you become incapable of doing so.
It’s important to have both POAs in place. You can choose the same person for both roles, or assign each responsibility to different trusted individuals, depending on their strengths and your comfort level.
Why Do POAs Matter?
Life is unpredictable. Illness, injury, or cognitive decline can affect anyone—at any time. Without valid POAs, your loved ones may have to apply to the Ontario Superior Court of Justice for guardianship, a process that is often stressful, expensive, and time-consuming.
Having your POAs in place protects you and the people you care about:
- Prevents Family Conflict: Choosing your attorneys in advance reduces the risk of disputes over who should make decisions on your behalf.
- Protects Your Finances: Your Attorney for Property ensures your financial responsibilities are handled efficiently and in your best interest.
- Saves Time and Money: Avoids the need for lengthy and costly court proceedings if you're no longer able to act for yourself.
- Protects Your Well-Being: Your Attorney for Personal Care can make informed health and personal decisions based on your wishes.
Who Should You Choose?
Choosing the right people as your attorneys is critical—they’ll have significant authority and responsibility. The TAC method can help you decide:
- Trustworthy: They will have access to your finances and medical decisions, so integrity is essential.
- Available: They should be accessible and able to act quickly, especially in emergencies. Ideally, they live nearby or are frequently in your area.
- Capable: They should be organized, reliable, and have a good understanding of your values and preferences. It helps if they are financially and emotionally competent as well.
You can name a backup attorney in each document in case your primary choice becomes unavailable or unwilling to act.
When Should You Set Up Your POAs?
If you haven’t already done so, now is the time. You must be mentally capable of creating your POAs. If you wait until you’re experiencing cognitive issues or a medical emergency, it could be too late.
Establishing your POAs while you’re healthy ensures your affairs will be managed according to your wishes, no matter what the future holds.
Final Thoughts
Powers of Attorney are a foundational part of your estate and retirement planning. Having both in place protects your autonomy, your assets, and your well-being.
At Matthews + Associates, we incorporate POAs into your broader financial and estate planning strategy. Through our comprehensive planning process and our strategic alliances with legal professionals, we help ensure your documents reflect your intentions and support your future.