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Stewart Carstairs, Shook, Wickham, Bishop & Field
The Power of Attorney (POA) is an important planning document, both in personal life and in business. It is a document used by one adult to appoint another adult to make financial and legal decisions on his or her behalf.
This delegation of authority can be very broad. For example, one could create a general POA authorizing the Attorney to do anything that the adult could do (except make a will). With such authority, the Attorney can manage finances, make investing decisions and mortgage or sell the adult’s home. A general POA of this nature can be a useful personal planning tool. If properly drafted, it can ensure that someone will be available to manage your financial affairs if you are no longer able to do so yourself.
A POA can also be of more limited scope. If you will be away on an extended holiday, for example, you may create a limited POA to ensure that someone is able to stand in your shoes should any unexpected issues arise affecting your business. A POA of this type may be limited in duration, for example expiring on your return from holiday. It may also be limited in scope, for example only authorizing your Attorney to execute documents specifically related to your business, or even a specific deal that needs to close during your absence.
Because your Attorney has the authority to manage your financial and affairs, there is a risk that he or she may misuse their authority. An Attorney may make a bad decision that has an adverse financial consequence, or they may wrongfully appropriate your assets. By law, an Attorney must not act outside of the scope of the authority set out in the POA document, and the Attorney must always act in the best interest of the person who appointed him. People do occasionally bend the rules and break the law, however. So choose your Attorney carefully.
There is much more to be said about POAs, but space here is limited. I encourage you to research them for yourself. There is plenty of information available online, and some of it’s even reliable. You can also gather more information from your lawyer or other professional advisors.
Stewart Carstairs is a Barrister & Solicitor with Shook, Wickam, Bishop & Field. He can be reached at 250.287.8355 or online through http://www.crlawyers.ca/.