You may think that a proper will is one of the most important things to have to protect your family in the event of your death. But appointing a suitable Power of Attorney (POA), or a mandatary for Quebec residents, to handle matters while you’re still alive could have an even greater impact on them.
What is a Power of Attorney or mandatary?
When assigning a POA or mandatary, you’re choosing someone to take care of your financial affairs and make medical decisions for you should you lack the capacity to do so. This person has enormous power and responsibility over your life, because they will be charged with ensuring your needs and wishes are met while you’re still alive.
Choosing a POA or mandatary can be difficult, however, having one in place can provide you with peace of mind, knowing that your wishes and finances are on stable ground. Careful and proper communication with family members now can minimize or avoid family conflict later, at what could be a very difficult time.
Your Power of Attorney for Property may or may not be the same individual as your Power of Attorney for Personal Care. In Quebec, your mandatary can act on your behalf with regard to both property and personal care, and may consist of one or more individuals.
To ensure your POA or mandatary is the best fit for you and your loved ones, consider these four important points.
In deciding whom to appoint, the most important question to ask yourself is: Who is trustworthy? You have to trust that person to carry out your wishes and be sure they have your best interest at heart.
2. Proximity and age of the individual
The person you choose should be close by – ideally someone from the same city or town – so that if a situation arises, they can be accessible as soon as possible. While it’s not legally required, it is desirable that your POA at least be a resident of Canada.
Avoid choosing someone much older than yourself, who may predecease you, or someone who lacks the kind of life experience they’ll need to draw from in order to exercise good judgment on your behalf. For instance, someone who owns property may be more familiar with the legal and practical considerations that come with this responsibility than someone who does not.
You should consider whether your POA has the intellectual capacity and business acumen to manage your finances, and the ability to exercise sound judgment over your healthcare needs. Here are some criteria to think about:
• Investment knowledge and financial management skills
An individual may be trustworthy but lack sufficient experience or knowledge to manage your financial affairs. Be sure your POA has a level of financial literacy relevant to your financial needs.
• Nature and complexity of the assets
Typically, if a person is married their spouse will be the Power of Attorney – assuming there is confidence that the spouse will be capable of managing the financial affairs. If for some reason the spouse-appointed POA does not have sufficient knowledge of their spouse’s financial affairs, it may be appropriate to appoint more than one attorney acting jointly.
4. Family dynamics
Your particular family dynamics are a crucial consideration. If some of your children or other family members do not agree with one another, a neutral person outside the family may be considered. Appointing family members jointly may result in an impasse and further strain family relations. On the other hand, appointing some family members over others could arouse suspicion or jealousy and lead to further conflict or litigation.
Given the immense responsibilities required of your POA or mandatary, it’s important to take your time when appointing someone. A financial planner can help you assess your situation objectively, and communicate your wishes to your family as an impartial third party. This will provide reassurance that you’ve made a well-thought-out decision, taking the best interests of all into account.
Emerita Mercado, T.E. Wealth, Toronto
Quebec content: Karen Hennessy, T.E. Wealth, Montreal
This article was published in T.E. Wealth’s Strategies newsletter, May 2017 edition. Read the full edition here.
These articles are for general informational purposes only. Please obtain professional advice before taking any action based on this information. No endorsement or approval of any third parties or their advice, information, products or services should be implied by any references to third parties contained in any article. Trademarks cited in these articles are the respective properties of their owners.