When David’s mother had a stroke, everything changed overnight. One moment, she was living independently; the next, she was in the hospital, unable to speak or make decisions for herself. David believed he was prepared. His mom had signed a Power of Attorney just a year prior. But when the doctor asked who had the legal authority to make decisions about her treatment, David was caught off guard. The Power of Attorney he had didn’t give him that right. It covered her finances, but not her health care. In British Columbia a Power of Attorney is only for financial and legal purposes, not health.
Sadly, David’s experience isn’t unique. Many people assume that a Power of Attorney covers all aspects of decision-making, but in Canada, that’s not the case. And when a crisis hits, the last thing anyone wants is legal confusion standing in the way of urgent care.
Understanding how a Power of Attorney works is important. At Carter Notary we take an educational approach, making sure you have all of the information you need to make knowledgeable decisions when it comes to important documents.
What Is a Power of Attorney?
A Power of Attorney (POA) is a legal document that authorizes someone else—called an “attorney”—to manage your money and property. Despite the name, this person does not need to be a lawyer. You can appoint one or more individuals to act on your behalf, and you control how much authority they have.
Across most of Canada, the person you choose is legally referred to as your attorney. Their role is to represent your interests when you can’t or prefer not to manage your own affairs.
There are three types of Power of Attorney:
1. General Power of Attorney
This document gives your attorney the authority to manage your finances and property—but only while you are mentally capable. A general POA may cover all your assets or just specific ones, and can take effect immediately or on a future date.
2. Specific Power of Attorney
This version allows your attorney to handle a clearly defined task or activity for a limited period. Once the task is completed or the time period ends, the authority expires. For instance, you might authorize someone to sell your home while you’re out of the country. These are often used for temporary or one-time purposes.
3. Enduring Power of Attorney
This is the most comprehensive document. It allows your attorney to continue acting on your behalf even if you become mentally incapable. It can take effect immediately or only once mental incapacity is confirmed (depending on how the document is written).
Enduring POAs are widely recommended for long-term planning, especially for aging adults or individuals facing potential health declines. Most Notaries in British Columbia, for example, prepare a general enduring POA that includes special clauses so your attorney(s) can act whether you’re capable or not.
What Can—and Can’t—Your Attorney Do?
If you do not place any limits on their authority, your attorney can:
- Access and manage your bank accounts
- Sign cheques on your behalf
- Buy or sell property in your name
- Purchase goods or services
- Handle day-to-day financial responsibilities and pay bills
However, there are clear boundaries. Your attorney cannot:
- Make or change your Will
- Alter life insurance beneficiaries
- Appoint someone else to act as your attorney
- Use your assets for their own benefit (unless explicitly permitted)
What About Health Care Decisions?
We want to make sure you understand the purpose of a POA. A general enduring Power of Attorney allows you to appoint one or more individuals to take care of your financial and legal matters on your behalf in the event you need them to step in or you become incapacitated. It does not allow them to make any medical decisions on your behalf.
In British Columbia if you want someone to have legal authority to make medical and personal care decisions on your behalf, you need a separate document. To act on one’s behalf for medical decisions, you must have a Section 9 Health Representation Agreement in place. These representation agreements include making decisions for minor and major health care, as well as personal care.
A Health Representation Agreement:
- Appoints a representative to make health and personal care decisions
- May include instructions about your medical treatment, end-of-life care, and living arrangements
- Only comes into effect when you’re incapable of making those decisions yourself
So, while your POA can pay your care facility bills, they cannot approve a surgery or determine where you’ll live unless they also have a Representation Agreement.
Who Makes a Good Power of Attorney?
Choosing the right person is just as important as creating the document itself. Most people select a trusted family member like a spouse, child, sibling, or parent. It’s strongly recommended to name two people, a primary attorney and a backup, in case one cannot act.
Here are some traits you want to look for in a good attorney:
- Financial Acumen: Can they read a bill or understand a contract?
- Financial Stability: Are they responsible with money?
- Willingness to Serve: Are they prepared for the responsibilities involved?
- Availability: Will they have the time when needed?
- Capability: Are they organized and competent with tasks like bill-paying and document management?
- Trustworthiness: Would you trust them with your bank card or personal information?
- Proximity: Being nearby helps, especially in urgent situations.
- Critical Thinking: Can they weigh options and act in your best interest?
- Reliability & Rationality: You want someone consistent and level-headed.
- Neutrality: Can they act without bias or personal motives?
- Communication Skills: Can they speak clearly with doctors, banks, or family members?
- Legal & Financial Literacy: While not required, this is an asset.
Appointing a Professional
If you don’t know someone who fits the bill, consider hiring a professional. Many Notaries, lawyers, and accountants offer this service for a fee. Though it adds cost, it provides peace of mind with a neutral, experienced person managing your affairs.
Think You Don’t Need a Power of Attorney? Think Again.
Many people assume that if they don’t own real estate or investments, they don’t need a POA. But that’s far from true. Everyone has something of value: a bank account, vehicle, pension, or government benefit.
You might need a POA only once, but that one time could be vital.
In British Columbia, for instance, many seniors eventually move into assisted living or long-term care. Without a POA, family members may struggle to handle basic tasks such as:
- Transferring pension payments
- Paying care home fees
- Closing or transferring rental agreements
- Filing income taxes
- Cancelling or managing phone or utility bills
- Paying credit cards or managing debts
Without legal authority, even a spouse or adult child may be blocked from accessing your accounts or handling your affairs, resulting in stress and delays.
Plan Ahead for Financial and Medical Authority
A Power of Attorney is a powerful tool, but it’s only part of the picture. If you want someone to manage your finances and property, an enduring POA is the right document. But for health care and personal decisions, you need a separate legal arrangement, such as a Health Representation Agreement.
At Carter Notary, we specialize in helping clients understand, create, and properly execute both types of documents. Please book an appointment using this link.
We’re here to partner with you, to make sure you and your loved ones are fully protected, both financially and personally.