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Power of Attorney & Living Wills – What You Need to Know

Power of Attorney & Living Wills - What You Need to Know

It is important to note that there is a very large difference between a Last Will and Testament and a Living Will (or what we call a Power of Attorney for Personal Care in Ontario). 

A Last Will and Testament deals with your wishes for the distribution of your estate after you have passed away.

A Living Will is a document that is in effect when you are alive and only deals with your health condition and medical treatment. It usually combines the naming of a Healthcare Proxy with an expression of the type of treatment you wish to receive through an Advance Directive.  This document only comes into effect on an incapacity.

Together, these documents, along with a Power of Attorney for Property, make up a complete Estate Plan in Canada.

Types of POAs

General Power of Attorney.

A General Power of Attorney is a legal document whereby one person called the Principal gives another person called the Agent or attorney-in-fact the power to manage the Principal’s assets and financial affairs while the Principal is alive and has mental capacity.

Continuing Power of Attorney.

This arrangement designates another person to act on the principal’s behalf and includes a clause that maintains the power of attorney after the principal becomes incapacitated. 

Special or Limited Power of Attorney.

In this instance, the agent has specific powers limited to a certain area. An example is a power of attorney that grants the agent authority to sell a home or other piece of real estate. 

What are the requirements for signing a POA?

There are certain formalities that must be adhered to when signing a power of attorney.  It is also important to ensure that the wording and any referred to legislation is accurate in order to avoid the document not being enforceable.  Unfortunately, if a document is found to be void after the principal is incapacitated there is nothing that can be done to change the document.  It is therefore important to make sure that the document is drafted properly with a lawyer.

There are also situations, such as, when a property is being sold, that the lawyers involved with the real estate transactions will require that a lawyer attest to attending to the POA, to witnessing it, and that in that lawyer’s belief the document is still in force.