What is Power of Attorney?
What is a power of attorney? A power of attorney is a legal document or agreement that gives one person (the “agent” or “attorney-in-fact”) the right to act on behalf of another person (the “principal or donor”). The agent can have different levels of power assigned to them. Usually, the agent has to make decisions about the principal’s finances, or property. In most cases, the principal is physically unable to be present during the decision making due to illness or stay in another city or country. There are four main types of powers of attorney, or POA.
The 4 Types of Power of Attorney
General power of attorney
A general power of attorney gives the attorney-in-fact the right and obligation to act on behalf of the principal in any and all matters concerning finances, property, and more, as allowed by the province. That normally includes signing documents or paying bills on behalf of the principal. This agreement ends when the principal passes away, becomes incapacitated, or makes the decision to end it or the attorney passes away.
Limited power of attorney
A limited power of attorney has more limitations, hence the name. It gives the agent the right to act on the principal’s behalf in very specific matters outlined in the agreement. It could be just signing one document or making one transaction when the principal is out of town. The agent usually only has this power for a limited amount of time.
Enduring power of attorney
While general power of attorney ends once the principal has become incapacitated, enduring power of attorney allows the agent to make decisions on behalf of the principal past that point. Of course, there are still certain limitations, all of which should be outlined in the agreement. For example, the agent can continue to represent the principal or pay their medical bills, but they cannot decide upon medical decisions or treatment.
Representation Agreement
This is a form of “power of attorney” specific to British Columbia and allows for healthcare decision making. This agreement is applicable if the principal or donor decides they want to allow the representative to make all healthcare-related decisions for them. The representative is then empowered to make these decisions to the best of their abilities.
Springing power of attorney
If the principal would like to give the power to make decisions on their behalf to their attorney-in-fact only after the principal’s incapacitation – they need to sign a springing power of attorney agreement. That outlines the conditions and describes the specific events that would need to occur to bring into effect the power of attorney’s rights. An example of such an event could be a health issue that would leave the principal unable to make decisions, thus giving the agent the responsibility for their finances. In order to avoid confusion, the terms need to be described in clear and comprehensive language.
Contact us for your questions or needs regarding power of attorneys!
By Karuna Beckmann