A Power of Attorney, also referred to as a POA, is a legal document that gives one or more persons the authority to make some or all of the legal and financial decisions, property, real estate or any business related decisions on one’s behalf. A POA can be applicable for a specific or unlimited duration of time. The person to whom the powers are granted is known as the attorney. This attorney can be any mentally capable adult of legal age: a spouse, a family member, a lawyer or an accountant; must not be involved in any type of bankruptcy proceedings when powers are assigned to them and must not own or work at an extended care facility or nursing home in which the grantor is a resident.
The attorney can perform all the personal financial actions of the grantor, such as banking, signing cheques, from sell or purchase of property; however, the attorney cannot make a Will for the grantor, cannot change any existing Will, cannot change a beneficiary or give a new POA to someone else on the behalf of the grantor. Therefore, the attorney must act in the best interests of the grantor while making financial decisions, and keep own finances and property separate from the grantor’s finances. One can still continue to make decisions about finances even while having a POA and cancel a POA as long as the person is mentally sound to do so; the grantor can also choose to put restrictions on the POA. Explore Definition
A person can appoint more than one attorney in the same POA and may appoint a substitute attorney in case the originally appointed attorney is incapable to perform, for reasons like their own death or their own mental incapacity. In case of more than one attorney named in the POA, the POA should state whether the attorneys must perform together (jointly) or if they can act separately. In Canada, every province and territory has its own laws about specific provisions and restrictions applicable to a POA.
Generally, there are two types of Power of Attorney used in Canada: Ordinary and Enduring
An Ordinary Power of Attorney is a legal document which is valid only while the grantor is mentally capable to give/grant the legal authority to the attorney to make financial decisions. This mental capacity is determined by the laws of the grantor’s province or territory of residence.
An Enduring Power Of Attorney, also known as a Continuing Power Of Attorney, is a legal document which the attorney to make financial decisions for the donor and continues to remain valid if the grantor ever becomes mentally incapable and unable to manage the financial affairs.
Both the POA forms become invalid once the grantor dies.