Without a power of attorney, the government may end up controlling your assets. Graphic by Lucy Barco

Power of attorney is for everyone

  • November 4, 2016

Get a lawyer. Get a will. Get a power of attorney — in fact, get two. These aren’t tricky or exclusive legal arrangements for rich people. Ordinary, average Canadians need these documents.

“Everybody should have a Power of Attorney for property who has assets, whether large or small assets,” said Toronto lawyer Stephen Ponesse.

Ponesse guesses that the number of Canadians who have no Power of Attorney arrangements in place would be approximately the same as the number who haven’t bothered with a Will. The two documents go hand-in-hand.

Unfortunately, that’s a big number. A 2012 LawPRO survey claimed 56 per cent of Canadians have no Will.

It may be that the majority has decided they’re never going to die or get sick. Those with a more sober view of the aging process do need a legal way of appointing someone responsible for their financial affairs, a legal way of ensuring someone can make medical decisions when they’re incapacitated and, finally, legal means of passing their assets on to children or others when they die.

“If a person does not have a power of attorney and if they become incapacitated, the Government of Ontario will send in an assessor to manage their affairs,” explains Ponesse.

You probably wouldn’t hand your car keys over to a stranger who said he was from the government. Giving a government agent exclusive control over your bank account, mortgage, RRSP, TFSA and insurance policy requires an even greater level of trust.

Without a Power of Attorney in place, your children may end up having to go to court to take control of your affairs back from the government-appointed assessor.

“The government is not trying to hang onto it, but you have to go to court to get that (Power of Attorney),” said Ponesse. “Which is time consuming, expensive, etc.”

The two kinds of power of attorney that everyone needs are Powers of Attorney for property — so that somebody can pay your bills, pay your rent, deposit cheques, etc. — and power of attorney for personal care so that somebody can consult with a doctor on your health issues.

Most Wills are pretty straight-forward — no fancy footwork required.

“If you are of average means and let’s say you’re married and you own your house jointly with your spouse, and you have a joint bank account, and you have a TFSA (tax-free savings account) with a beneficiary, and you have an RRSP (registered retirement savings plan) with a beneficiary, your total estate is going to go to your spouse tax-free in any event,” said Ponesse.

Widowers and those with no children may need to be a little more specific in their Wills.

Nobody likes thinking about death or Alzheimer’s or cancer. But the real barrier may be that people don’t like walking into a lawyer’s office with no idea how much it’s going to cost.

Prices can vary. You can draw up a will and two Powers of Attorney at the Axess Law kiosks in many Walmart stores for $99. There are loss-leader deals some lawyers offer for similar prices.

“For the lawyers who charge the lowest price, you probably are often not dealing with the lawyer,” warns Ponesse.

A Will or Power of Attorney drawn up in half an hour by a paralegal is valid, but it might not take everything into account.

“If you can get a lawyer who will give you his or her personal attention for a reasonable price, that’s the best lawyer to get. You want the lawyer,” Ponesse said. “When I go for surgery, I want the surgeon.”

To draw up two Wills and four Powers of Attorney (two each), depending on the level of complexity, a middle class home-owning couple should get it all done for less than $1,000.

If you don’t want to pay, you can try it on your own — in Ontario, try the Attorney General’s website (attorneygeneral.jus.gov.on.ca/english/family/pgt/poakit.php) — but Ponesse does not recommend you try it yourself.

There are also circumstances where it’s wise to set up a trust, but for most people, two Powers of Attorney and one Will does the trick.

“Powers of Attorney are for everyone, not just rich people,” said Ponesse.

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