Types of power of attorney

There are 3 types of power of attorney – each addresses a different estate planning need.

In Ontario, there are 3 different types of powers of attorney you can give someone:

  1. A non-continuing power of attorneyPower of attorney A written authorization for another person to make financial and health care decisions for you if you are not able. Rules vary from province to province.+ read full definition for property
  2. A continuing power of attorney for property
  3. A power of attorney for personal care

1. Non-continuing power of attorney for property

This is used in specific situations for a specific length of time (for example, when you’re out of the country). You outline the specific tasks your attorney is allowed to do on your behalf, and for how long.

A non-continuing power of attorney is automatically revoked if you become mentally incapacitated, so it’s not a substitute for a continuing power of attorney. Make sure you have a continuing power of attorney in place as well.

2. Continuing power of attorney for property

This authorizes another person to act on your behalf in financial matters if you become mentally or physically incompetent. If you are unable to act on your own behalf, your attorney can:

  • pay your bills,
  • apply for benefits you may be entitled to as a result of your disability,
  • collect pensionPension A steady income you get after you retire. Some pensions pay you a fixed amount for life. Others save up money for you while you are working. You use that money to create income after you retire.+ read full definition and other income you’re entitled to,
  • monitor your investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition portfolioPortfolio All the different investments that an individual or organization holds. May include stocks, bonds and mutual funds.+ read full definition, and
  • ensure your assets are otherwise protected.

You can make the power of attorney as specific as you want. Just make sure it’s broad enough for your attorney to carry out your wishes and manage your affairs effectively. This usually means giving fairly broad powers to manage your financial affairs in case of incapacity.

3. Power of attorney for personal care

This lets someone else make health-care decisions on your behalf if you become incapacitated.

These health-care decisions can be difficult, involving your quality of care and possibly your continued life support. Be sure you choose an attorney who is prepared to handle the emotional toll that these responsibilities may take.

If the decision is about medical treatment or admission to a long-termTerm The period of time that a contract covers. Also, the period of time that an investment pays a set rate of interest.+ read full definition care facility, a health professional must determine that you are incapable of these decisions before your attorney can act.

Make a living will part of your power of attorney

As part of a power of attorney for personal care, many people include what’s known as a living willLiving will A legal document that sets out the medical care that you do or do not want in case you are ever not able to state your wishes.+ read full definition. This is a statement of wishes about what they want and don’t want their doctors to do if they are not able to express their own wishes about end-of-life health care.

For example, many people write that they don’t want to be kept alive on life support if there is no hope they’ll recover from a bad accident or illness. Many people also state their wishes about organ donation.

The benefit of including such a statement is that your loved ones will know what to do in a medical crisis – and they won’t have to wonder later if they did the right thing. This can be a big help to your family at a very difficult time.

Entitlement to payment

Your attorney under a continuing power of attorney for property has a statutory right to be paid. If the power of attorney document does not address payment, your attorney will be entitled to:

  • 3% of money received by the attorney,
  • 3% of money paid out by the attorney on your behalf, and
  • 3/5 of 1% of the average annual value of the assets covered under your power of attorney.

You can specify a different payment amount by writing it in the document. You may also not want to pay your attorney anything – such as when a close family member takes on the role without expectation of payment. Be sure to include this in the document, as they will have a right to payment otherwise.

Your attorney under a non-continuing power of attorney for property or a power of attorney for personal care has no statutory right to be paid. However, you can include payment terms in your power of attorney documents if you want to pay them for their services. Your attorney can also apply to a court to ask for payment for their services.

Get legal advice

The Ontario government provides standard power of attorney forms, but you may want to have a lawyer draft a power of attorney that specifically meets your needs and circumstances. At the very least, consult a lawyer before signing a power of attorney. They will ensure the document clearly states the conditions under which it takes effect.

Take action

Read this Ontario government guide for more detailed information about powers of attorney.

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