Area of Law: Wills, Estates and Powers of Attorney
Answer # 157
What is a Power of Attorney for Property?Region: Ontario Answer # 157
A Power of Attorney for Property is a written document in which you give someone the power to make decisions about your property and finances if you become unable to make these decisions yourself. For example, your Attorney for Property could be responsible for taking care of your banking matters, managing your investments, running your business, buying and selling real estate on your behalf, or paying your monthly bills. The only thing that you could not appoint an attorney to do is to write your Will. Although the person you give this power to is called your “attorney,” it does not mean that they are your lawyer. Most often, your attorney is your spouse, a relative, or a close friend.
What can your Attorney for Property do?
The kinds of things that your attorney can do depends entirely on how much power you give them. You could give a general Power of Attorney for Property that covers all of your property and financial affairs. Or, you could give a more specific Power of Attorney for Property that allows the attorney to handle only some of your affairs. For example, you could even limit the Power of Attorney to a single real estate transaction while you are out of the country.
You must clearly outline what you are allowing your attorney to do, and when you are allowing them to do it. For example, often people wish to prepare a Power of Attorney in case they become unable to take care of certain things as they get older. If you only want your Power of Attorney to take effect at some point in the future, or upon a specific occurrence, you must clearly state this.
How long does your Power of Attorney for Property last?
If you do not limit your Power of Attorney in any way, then it continues to have effect until your death. In fact, you may often hear a Power of Attorney being called a Continuing Power of Attorney for Property. This means that the Power of Attorney continues to have effect even if you become mentally incompetent. If you have an old Power of Attorney, you should check with a lawyer to determine if it will have effect should you become mentally incompetent.
Who can give a Power of Attorney for Property?
There are certain rules about who can give a Power of Attorney for Property, and who can be appointed as an attorney. To give a Power of Attorney for Property, you must:
- be 18 years of age or older,
- be mentally capable,
- be aware of the property you own and its general value,
- understand what it means to appoint an attorney,
- know what authority you are giving your attorney, and
- you must understand the possibility that the attorney could misuse the power you are giving them.
Who can be an Attorney for Property?
Your attorney must be someone who is 18 years of age or older and mentally competent. Although it may be best to select someone who has some knowledge of financial matters, above all, you should select someone you know well and trust.
You can appoint more than one attorney, and you can also name an alternate attorney who would step in if the main attorney was unable to act for some reason. If you are uncomfortable selecting a family member or friend to be your attorney, you may also want to consider selecting a trust company to be your attorney for financial matters. Often people choose trust companies because they are professional and impartial.
Requirements for a valid Power of Attorney for Property
To be legal, a Power of Attorney needs to be in writing, and signed by you and two witnesses. The two witnesses must both be present when you sign your Power of Attorney. People who the law does not allow to be witnesses include, the attorney you are appointing, the attorney’s spouse or partner, your own spouse or partner, your child or any person under the age of 18.
More information about Powers of Attorney can be found from the Ministry of the Attorney General.
Drafting a Power of Attorney for Property involves a number of technical legal details. It can also cause many problems if it is not prepared correctly.
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