When it comes to estate planning, having a will is crucial to ensuring that your final wishes are honored. But what will happen if you become unable to deal with your finances and make decisions regarding the planning of your estate, especially your will?

 

This is where power of attorney comes in. It is a legal arrangement that allows you to appoint someone you trust to make legal and financial decisions on your behalf to ensure that your matters are managed effectively. But while this person can manage several aspects of your estate, there are limits to what they can do, especially when it comes to powers of attorney on your will.

Can Power Of Attorney Change a Will In Canada?

In Canada, a Power of Attorney does not possess the direct authority to change a Will. The primary function of a Power of Attorney is to grant an individual the power to make financial and legal decisions on behalf of the principal, particularly in cases of incapacity.

While the appointed attorney can influence financial matters, altering the provisions of a Will requires a separate legal process. To make changes to a Will, individuals typically create a new Will or execute a codicil, a legal document amending specific provisions of an existing Will. It’s crucial to understand these distinctions to navigate the intricacies of estate planning effectively.

What Are the Types Of Powers Of Attorney In Canada?

There are two types of Power of Attorney in Canada, General Power of Attorney and Enduring Power of Attorney, each with its distinct features and implications that impact estate planning and financial decision-making.

General Power Of Attorney and Special Power of Attorney (POA):

A General Power of Attorney is a comprehensive document that grants broad authority to an appointed individual, known as the attorney, to manage various financial and legal affairs on behalf of the principal. A Special Power of Attorney gives your representative powers to handle specific matters on your behalf.

The powers conferred in a General POA or Special POA cover a spectrum of actions, including transactions with financial institutions, property management, bill payments, and other financial matters.

An important caveat is that the authority of a General POA or Special POA becomes null and void if the principal loses mental capacity. Therefore, its effectiveness is limited to situations where the principal is mentally competent.

Enduring Power Of Attorney (EPA):

On the other hand, an Enduring Power of Attorney remains effective even if the principal becomes mentally incapacitated. This enduring nature ensures a seamless continuation of decision-making authority by the appointed attorney during the principal’s vulnerable periods.

The EPA is particularly valuable for long-term planning, providing a layer of protection when the principal may no longer be able to manage their financial and legal affairs independently. The powers granted under an EPA can encompass a range of decisions, similar to a General or Specific POA, but with the added advantage of ongoing efficacy in situations of mental incapacity.

What Can a Power Of Attorney Do?

The powers vested in a Power of Attorney (POA) are extensive, encompassing a broad spectrum of financial and legal matters related to estate planning. In the financial domain, the attorney is granted significant authority, often referred to as financial power. This includes managing bank accounts, conducting real estate transactions, paying bills, making investment decisions, and engaging in other financial transactions as specified in the document.

Simultaneously, the POA grants authority in legal matters, enabling the attorney to sign legal documents, engage in legal proceedings, and make decisions related to the principal’s personal affairs.

This dual authority underscores the flexibility provided by a well-drafted Power of Attorney document, allowing individuals to tailor the scope of financial power and legal authority to meet their unique needs and preferences.

What Can a Power Of Attorney Not Do?

While a Power of Attorney (POA) in Canada grants significant authority to the appointed individual (the attorney), there are crucial limitations to prevent misuse and protect the principal’s interests. One primary restriction is that a POA cannot be used to make decisions regarding the principal’s health or medical treatment. This is referred to as medical power and is typically addressed through a separate document known as a healthcare directive or living will.

Additionally, a POA does not confer the power to change the terms of the principal’s Will. Testamentary intentions and the distribution of assets upon the principal’s death are distinct matters governed by the Will itself. Furthermore, the attorney is bound by the duty to act in the principal’s best interests, and any actions contrary to this obligation may be legally challenged.

How to Deal With Potential Abuse

Addressing potential abuse of a Power of Attorney (POA) in Canada requires a proactive and vigilant approach to safeguard the principal’s interests. Regular communication and transparency between the principal and the attorney can serve as an initial preventative measure. 

If signs of abuse or misuse emerge, taking prompt legal action may be necessary. This can involve applying to the court to revoke the existing POA, replacing the attorney, or seeking a court order to stop any harmful actions. In cases where the principal is vulnerable, involving supportive family members, healthcare professionals, or social services can provide an additional layer of protection.

It’s crucial to document any suspected abuse and gather evidence to support legal proceedings if required. Seeking legal advice early in the process can guide individuals on the most effective course of action, ensuring that potential abuse is addressed promptly and thoroughly.

Does a New Will Override an Old Will?

Generally, the legal principle is that the most recently executed Will takes precedence over previous versions. When an individual decides to create a new Will, it is essential to consider the implications of this decision on the distribution of assets and testamentary intentions.

The process of drafting a new Will involves revoking any prior Wills explicitly, reinforcing the notion that the latest document reflects the individual’s current wishes. However, the effectiveness of this revocation is contingent on adherence to legal formalities. If the new Will does not comply with the necessary legal requirements or if there are disputes regarding its validity, the old Will might still be recognized.

When contemplating changes to testamentary documents, seeking legal guidance ensures that the process is executed meticulously, minimizing the potential for legal challenges and ensuring that the most recent Will accurately reflects the individual’s intentions.

How to Choose the Right Attorney?

Selecting the right individual to act as your attorney under a Power of Attorney (POA) in Canada is a critical decision with far-reaching implications. Several factors should be considered:

Trustworthiness and Reliability

Choose someone with a proven track record of reliability and trustworthiness. This person will be handling your financial and legal affairs, so a high level of integrity is paramount.

Understanding Of Responsibilities

Ensure your chosen attorney understands the scope of responsibilities outlined in the POA document. They should be aware of the limitations and the fiduciary duty to act in their best interests.

Availability and Accessibility

Opt for someone who is geographically accessible and available when needed. Proximity can be crucial for swift decision-making, especially in urgent situations.

Financial Acumen

If the POA involves financial matters, select someone with a sound understanding of financial management. This is crucial for making informed decisions regarding investments, budgeting, and other financial affairs.

Communication Skills

Effective communication is vital. Your attorney should be capable of conveying your wishes accurately and transparently to relevant parties, avoiding misunderstandings.

Legal Knowledge or Willingness to Seek Advice

While legal expertise is beneficial, it’s equally essential that the chosen attorney is willing to seek legal advice when needed. Some matters may require specialized knowledge, and a willingness to consult professionals ensures accurate decision-making.

Stability and Long-Term Availability

Consider someone stable and likely to be available over the long term. If the POA is designed for enduring powers, choosing an attorney who will remain committed to the role is crucial.

Compatibility With Your Values

Ensure that your attorney shares similar values and understands your preferences. This alignment can contribute to more intuitive decision-making in line with your wishes.

Do I Need a Lawyer to Change the Power Of Attorney On a Will?

Whether you require a lawyer to make changes to the Power of Attorney (POA) on a Will in Canada depends on the complexity of the modifications and the potential legal implications. Here are key considerations:

Legal Expertise

If the changes involve intricate legal matters or significant alterations, seeking the expertise of an experienced estate planning attorney is advisable. Lawyers specializing in estate planning understand the legal nuances and can ensure that modifications align with the law.

Proper Documentation

Lawyers can help draft and execute the necessary legal documents with precision. This is crucial to avoid ambiguities or challenges in the future.

Compliance With Legal Requirements

Changes to a POA on a Will must adhere to specific legal requirements. Lawyers are well-versed in these regulations, ensuring that the modifications are valid and enforceable.

Prevention Of Legal Challenges

Experts in Canadian and Alberta Estate Law can help minimize the risk of legal challenges by ensuring that the changes are made by the principal’s true intentions and comply with all applicable laws.

Complex Family Situations

In cases involving complex family dynamics or potential disputes, legal guidance becomes even more crucial. Experienced lawyers can anticipate potential challenges and structure the changes to withstand scrutiny.

Efficiency and Accuracy

Lawyers bring efficiency and accuracy to the process, helping individuals navigate legal requirements smoothly and reducing the risk of errors.

Choosing the most suitable power of attorney for your will is a very important decision that shouldn’t be taken lightly. And with so many legal complexities surrounding power of attorney, it can get overwhelming.

If you need help with choosing or managing power of attorney, contact DLegal and speak to an experienced estate lawyer today. We are here to help you develop a comprehensive estate plan, including selecting the most appropriate power of attorney to give you peace of mind.