In most provinces, there are two types of incapacity planning documents that are prepared alongside a will as part of a comprehensive estate plan—one to cover financial decisions (Enduring Power of Attorney) and one to cover healthcare decisions (Personal Directive).
An Enduring Power of Attorney (POA) is a legal document that gives one or more persons the authority to make financial decisions on your behalf in the event you ever become mentally incapable of doing so yourself.
While a POA can make financial decisions for you, you will need to elect a Personal Directive to make your personal decisions if you are incapable of doing so yourself. These personal decisions include where you live, your personal activities and medical treatments.
In Canada, every province and territory has its own laws concerning specific provisions and restrictions relevant to Enduring Power of Attorneys and Personal Directives. Outside of Alberta, there are several different names depending on where you live.
An Enduring Power of Attorney & a Personal Directive are Different from a Will
And you should have all three. A simplistic way of looking at these three documents is a will lays out how you want your assets distributed once you’ve passed away while an Enduring Power of Attorney and Personal Directive are for situations when you’re alive but not mentally capable of making decisions for yourself. Incapacity could be the result of an accident, an illness, or a decrease in your mental fitness which can happen at any stage in your life.
We recommend having an Enduring Power of Attorney, Personal Directive, and a will. If you don’t have a will already, visit our article on understanding Will Basics to get started on this with your legal team.
What is the difference between an Enduring Power of Attorney & Personal Directive?
Below we explain the differences between an Enduring Power of Attorney and Personal Directive. The table is an overall guideline and for education purposes, your legal team can help explain and specify what’s included in these specific documents.
|Enduring Power of Attorney||Personal Directive|
|What does this person decide?||
Makes decisions and acts on your behalf for all your financial affairs.
|Makes decisions related to healthcare, end-of-life care, and all personal activities including who you live with and where you live.|
|What powers are granted under this document?||
-Access to your bank accounts and investments.
-Managing your funds and using them to pay your expenses.
-Responsible for filing your annual income taxes.
-Ability to sell your house on your behalf if you need to move (e.g. moving into an assisted-living facility).
Decisions related to:
|What are the legal requirements of an attorney?||
-The age of majority in your province.
-Must be mentally competent.
-The age of majority in your province except Ontario.
-In Ontario your attorney for personal care can be 16.
-Must be mentally competent.
|How should I choose an attorney?||
-Select someone you trust with a strong financial background.
-Can also be named as an executor, guardian, personal directive, or beneficiary.
-Must have the maturity and emotional intelligence to deal with difficult situations. This should be someone you trust.
-Can also be named as an executor, guardian, Enduring POA, or beneficiary.
What happens if I don't have an Enduring Power of Attorney & Personal Directive?
If you become incapacitated and have not delegated an Enduring Power of Attorney or Personal Directive, one of your family members or friends may have to go to court to become your trustee or guardian. Not only does this take time and money, but your trustee or guardian may not know your wishes or be who you want making decisions on your behalf.
Life can be unexpected and it’s always important to prepare for unforeseen circumstances. By having Enduring Power of Attorney and Personal Directive legal documents in place, you can have peace of mind knowing that your assets and lifestyle will be managed by someone you trust in case you’re unable to do so yourself.
At SANDSTONE we recommend you consult with your legal team to ensure all the legal documents pertaining to your estate are in place. We can assist you as you go through the thought process of writing your will and are happy to introduce you to a lawyer. Furthermore, we can provide an independent analysis once your will is complete.