A power of attorney (POA) is a legal document that grants someone else the authority to act on your behalf in regards to your financial affairs. If you lose capacity without a power of attorney in place, it can create significant challenges for your loved ones to manage your affairs and make decisions on your behalf. Here’s what generally happens in such a situation:
Inability to Make Decisions:
If you become incapacitated due to illness, injury, or mental health issues without a power of attorney in place, you will not have a designated individual who has legal authority to make financial decisions on your behalf. Your assets become effectively frozen, as your signature is needed to sell or mortgage a home, manage investments, renew car insurance, pay bills or withdraw from your bank accounts. Without someone else stepping in to manage your assets on your behalf, your accounts will remain frozen, likely until your executor receives a grant of probate after your death.
If you lose capacity and are unable to make decisions for yourself, family members or trusted friends may need to apply to the court to become your guardian or committee. This process can be time-consuming, expensive, and emotionally taxing. Generally, committeeship applications take between 3 to 6 months, cost between $6,000 to $10,000 dollars, and are a huge headache for your loved ones.
Public Guardian and Trustee:
In the absence of a designated power of attorney, the Public Guardian and Trustee of British Columbia might step in to manage your financial affairs if no one else volunteers to do so. This governmental body has the authority to act on your behalf, but this might not align with your personal wishes or preferences. The Public Guardian and Trustee also charges onerous fees both initially and yearly to manage an individual’s financial affairs.
Solution – Power of Attorney:
To avoid these challenges, establishing a legal power of attorney is strongly recommended while you are still capable of making decisions. This document will allow you to designate a trusted individual to manage your affairs in the event you become incapacitated. It’s also important to consult with an experienced estate planning lawyer who can ensure the document is properly prepared and aligned with your specific needs and preferences.
Consult with an experienced estate planning lawyer in British Columbia at Westcoast Wills & Estates. Each power of attorney is unique, and our estate lawyers can design one for you at a reasonable cost.