A power of attorney is a legal document that allows you to appoint a trusted individual to manage your financial and legal affairs. This type of document can help ensure your interests remain protected if you become unable to manage your business affairs yourself. The person creating a power of attorney is known as the donor. The person appointed to step in is known as the attorney, which, in this case, refers to a representative, not necessarily a lawyer.

What Can a Power of Attorney Do?

With a power of attorney, you grant another individual specific legal authority. This authority can be broad or strictly limited to certain tasks. The scope of the powers granted depends on the language of the written agreement. For example, a donor might grant an attorney authority to sell a specific property or grant full control over all legal and financial decisions.

The Power of Attorney Act outlines the requirements for a valid document and sets the standards for who can serve as an attorney and how the document must be witnessed. Compliance with these provincial laws helps ensure that, when the time comes to act, banks, land title offices, and other institutions will recognize the attorney’s authority.

What Are Enduring Powers of Attorney?

Standard powers of attorney typically end if the donor loses mental capacity, which can leave gaps in protection.  An enduring power of attorney, on the other hand, includes a clause stating that the attorney’s authority continues if the donor becomes mentally incapable. The law outlines specific requirements for enduring powers of attorney. One requirement is that the document must state whether the attorney can exercise authority while the donor is capable or only after the donor becomes incapable. This choice allows individuals to tailor their estate plans to family dynamics and comfort levels.

What Are the Requirements for a Valid Document?

To help prevent fraud and ensure that donors fully intend to grant authority, British Columbia law is precise in its requirements for a legally binding power of attorney.

Legal requirements include the following:

• The donor must be 19 years of age or older.
• At the time of signing, the donor must understand the nature and consequences of the document.
• The power of attorney must be in writing and signed by the donor.
• The signing must be witnessed by two adults, or by one lawyer or notary public.
• The attorney must sign the document before exercising any authority.

If you fail to meet these legal standards, third parties such as the Land Title and Survey Authority (LTSA) may not accept the document. If a power of attorney is found invalid after the donor has lost capacity, the family may have to apply for a court-ordered committeeship. This can be a longer and more costly process.

Who Should You Choose as Your Attorney?

The person you select to act on your behalf is an important decision, as he or she will have access to your bank accounts, real estate, and investments. Your attorney must be an adult who is mentally capable of making financial decisions. Many people appoint a spouse, an adult child, or a professional trust company.

Lawyers have a legal duty to act in the donors’ best interests. They must act honestly, in good faith, within the authority granted in the document, and exercise the skill, care, and diligence of a reasonably prudent person. They must also keep donors’ assets separate from their own, keep accurate records of all transactions, and produce them for inspection upon request. An attorney who fails to uphold these duties can be held liable under the law. We recommend discussing expectations with a potential attorney before finalizing the document to ensure the chosen person is willing to accept the responsibility.

Get Legal Assistance in Langley

Proper planning provides a clear roadmap for your representatives. At Milestone Real Estate Lawyers, we can draft clear language that conveys your intentions while meeting all statutory requirements. Professional oversight can help ensure a document functions as intended and help prevent future disputes among family members. Contact our firm at 778-907-9245.