An important part of financial planning is making sure that you have an estate plan that meets your personal needs. A key component of any well constructed estate plan is to make sure that you have an up to date power of attorney for financial decisions (referred to as a “protection mandate” in Quebec). This is a document where one person gives someone else the power to make financial decisions on your behalf. If you don’t already have this type of document in place, you should make sure that you speak to an estates lawyer or notary as soon as possible. Here are some of the reasons why you should address this now:
- Loss of Mental Capacity. If you wait too long to create one of these documents, you may no longer have the required capacity to sign the document. Choosing a substitute decision maker is a big decision, and your lawyer will need to feel comfortable with your decision-making capacity before allowing you to sign one.
- Additional burdens on your loved ones. If you don’t put a power of attorney or protection mandate in place, and you become incapable of making financial decisions, your family members will have to apply to court to take over your affairs, which can be a time consuming and expensive proposition. (Court approval of the protection mandate is required in Quebec before your mandatary can act on your behalf). It is also possible that a court will choose someone you would not have chosen because they won’t know what your preference might have been.
- Spouses are not automatically entitled to act. Understand that spouses don’t automatically have the power to act for one another, so even if you’re in a committed relationship, be sure to sign a power of attorney or protection mandate giving your spouse the right to act on your behalf. It’s also important to always have an alternate in case your primary attorney isn’t able to do it.
- No immediate loss of control. Don’t hesitate to sign a power of attorney document because of a fear of losing control over your affairs. Having a power of attorney document in no way takes away from your ability to manage your assets, and in fact, you don’t need to even tell your attorney that they have the power to act immediately. Simply let them know where you keep your important documents in case they need to access them at some point in the future. The problem with waiting too long to put a power of attorney in place is that you may not have sufficient capacity to sign a document by the time you really need it. When you designate someone as your attorney, that doesn’t detract in any way from your ability to manage your assets, so long as you have capacity to do so.
When updating your legal documents, speak to a lawyer who specializes in estate planning, and if possible, has their TEP or “Trust and Estate Practitioner” designation. Under no circumstances would a “do it yourself” will or power of attorney be recommended. If you complete the documents improperly, your family won’t be able to fix the problem once you’ve lost capacity or passed away. Also speak to your IG Consultant about how to best structure your estate to ensure that it meets your personal needs.