Why you need an Enduring Power of Attorney
An EPOA is a legal document that appoints someone to act on your behalf should you become mentally incapable of handling your financial and legal affairs for whatever reason, whether from age, illness or accident.
Mental incapacity continues to be an issue for more and more families. The Alzheimer Society of Canada estimates new cases of dementia among seniors will be two and a half times higher in 30 years.
Unlike an ordinary Power of Attorney whose authority ends when you become mentally incapable, an EPOA, because it's "enduring" or continues on, can do double-duty. You can use it to give someone the power to act temporarily, for example during a hospital stay where you may not be able to manage your affairs, even though you're still mentally capable. But it can remain in force if things change permanently. It can also be designed to spring into action only once you lose capacity.
Holding assets jointly can offer similar protection as an EPOA, but isn’t as flexible. Some circumstances require consent from both parties when dealing with certain property; consent which is not possible once incapacity strikes.
Without an EPOA, no one can automatically step in to act on your behalf. Your spouse may not be able to sell assets you jointly own, your home for example, should it become necessary. Or your family couldn't access a bank account solely in your name to pay your bills. Instead, your loved ones could be forced to go through the potentially costly, stressful and time-consuming process of applying to the courts for a trustee order to take over your affairs.
Choosing an attorney
Given the inherent power of an EPOA, you must choose your "attorney" carefully. The person needn't be a lawyer; often spouses will appoint each other, yet it's also wise to appoint an alternate, such as an adult child or close friend.
An attorney, first and foremost, should be trustworthy, willing to act in your best interest, and have skills equal to the task. After all, you'll be giving this person the authority to do almost anything in your place, including managing your investments, handling tax matters, operating your business or dealing with real estate.
While your lawyer will be your primary source for drawing up a Power of Attorney, be sure to speak with your financial advisor to discuss any financial ramifications of some of the decisions you’ll be making.