Page 165 - A Canuck's Guide to Financial Literacy 2020

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Power of Attorney

A power of attorney document is an important estate planning tool. It gives an individual or
perhaps more than one individual the authority to make decisions on your behalf regarding
property, financial affairs or personal care. For example, an attorney can:

▪ deposit and withdraw funds from your bank account
▪ deal with creditors and make payments on debts
▪ purchase suitable investments on your behalf
▪ deal with rental, business or commission income
▪ purchase real estate on your behalf
▪ provide and decide on medical care decisions

At the time of signing, you must be mentally capable and aware of consequences that might
arise. The person who gives the power of attorney is known as the donor or principal and
the person who receives the power is called the donee or attorney.

Choosing the Power of Attorney

Usually, the power of attorney is a family member. If you have more than one family
member, you should consider the person’s

▪ Financial & health background
▪ Your choice of a power of attorney should have the intellectual capacity and
business acumen to manage your finances. Lack of investment knowledge or
financial management skills could impact your net worth dramatically.
▪ Trustworthiness & experience in managing your affairs
▪ A relationship is built on trust. The power of attorney should be trustworthy and
be aware of your financial situation, past, present and future.
▪ Knowledge and understanding of fulfilling your wishes
▪ The attorney should be respectful of your wishes and act in your best interests.
The power of attorney may also be the executor who would follow your
directions as laid out in the will.
▪ Proximity and age of the individual
▪ The attorney should be someone who resides in the same province as you with
close proximity to your current residence as when a situation arises, they’re able
to act. Age is an important factor as well as you do not want your attorney to
predecease you but at the same time, the individual should be mature in life
experiences.

If you do not have a family member that you can appoint as a power of attorney, you may
name a public trustee.