A durable power of attorney for property — or financial power of attorney — is a simple, inexpensive, and reliable way to arrange for someone to manage your finances if you become incapacitated (unable to make decisions for yourself). A Continuing Power of Attorney is a legal document in which a person gives someone else the legal authority to make decisions about their finances if they become unable to make those decisions themselves. The person who is named as the attorney does not have to be a lawyer. The power of attorney is called “continuing” because it can be used after the person who gave it is no longer mentally capable. Some people use the word “durable” which means the same as “continuing”.Power of Attorney for property is an important document to make, but it is even more important to your family. A power of attorney for property can be drafted so that it goes into effect as soon as you sign it. It is important to specify that you want the power of attorney to be durable or continuing. Power of attorney generally gives the designated person broad authorization to handle all of your finances. But you can give your attorney as much or as little power as you wish. Think carefully before you limit the scope of your attorney’s authority. If you become incapable of making financial decisions and your attorney does not have full authority, it may be necessary for your attorney, a family member, friend or the Public Guardian and Trustee to be appointed as your guardian in order to manage the balance of your property. In that case, a management plan must be filed and security may be required. You may want to give your agent authority to do some or all of the following:
- use your assets to pay your everyday expenses and those of your family
- buy, sell, maintain, pay taxes on, and mortgage real estate and other property
- collect Social Insurance or other government benefits
- invest your money in stocks, bonds, and mutual funds
- handle transactions with banks and other financial institutions
- buy and sell insurance policies and annuities for you
- file and pay your taxes
- operate your small business
- claim property you inherit or are otherwise entitled to
- transfer property to a trust you’ve already created
- hire someone to represent you in court, and
- manage your retirement accounts.
Your continuing power of attorney for property automatically ends at your death, when your will kicks in. That means that you cannot give someone authority to handle things after your death, such as paying your debts, making funeral or burial arrangements, or transferring your property to the people who inherit it. If you want your agent to have authority to wind up your affairs after your death, use a will to name that person as your executor.
You can choose anyone you want as your attorney as long as he or she is 18 years of age or more. Many trust companies are prepared to act as attorney and charge a fee for this service. Some individuals choose this option because they want an attorney who is professional and impartial. It is important to know that by making this power of attorney, you revoke (cancel) any other continuing power of attorney for property that you have made before. If you have made such a power of attorney before and you don’t want to revoke it, you should consult with a lawyer so that he or she will make the necessary changes to this form. If you want more than one person involved in your financial decisions, you can name more than one person to be your attorney for property. But you are not required to do so. On the other hand, you may decide not to name more than one attorney if you’re concerned about the possibility of disagreements or if you believe it may be difficult for others to deal with more than one person concerning your finances.
Your continuing power of attorney will end in several circumstances, most common of which are:
- You revoke it. As long as you are mentally competent, you can revoke a durable power of attorney at any time.
- A court invalidates your document. It’s rare, but a court may declare your document invalid if it concludes that you were not mentally competent when you signed it, or that you were the victim of fraud or undue influence.
- No attorney is available.To avoid this problem, you can name an alternate attorney for property in your document