May, 2023

Disclaimer: This article on the powers of attorney is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.

One of the only constants in life is change. Our circumstances can change at any moment. And we cannot understate the importance of preparing for whatever comes our way.

At Beeksma Law, we want you to be able to protect your families, your assets and your wishes. That is why we strongly encourage our clients to have powers of attorney for personal care and for property. 

Because the cost of not having them in place is too high. 

In this article, we will talk about why it is imperative that you have powers of attorney prepared. Then we will discuss what can happen if you fail to do so. If you would like to discuss your estate planning, please get in touch with our office. We would be more than happy to help you discuss your options. 

Why you may need a Power of Attorney

The Power of Ontario Act governs powers of attorney in Ontario and gives someone (an attorney) the power to act and make decisions on your behalf if you become mentally incapacitated. You may be deemed mentally incapable and unable to decide about your property or personal care for various reasons. For example, it may be because of an accident or the result of an illness. 

To be fully protected, you will want to prepare each type of power of attorney: a power of attorney for property and a power of attorney for personal care. 

A power of attorney for personal care covers decisions about your personal care. For example, it may include decisions about your medical treatment, health care, where you will live, and the type of care you will receive. 

On the other hand, a power of attorney for property covers decisions related to your finances and property. This can include paying bills, managing investments, and buying or selling property. 

What happens if you do not have a power of attorney? 

As noted in this article, this is where powers of attorney and wills differ. If you die without a will, the Intestacy Act outlines what happens to your estate.

However, if you are incapacitated and do not have a power of attorney, there is no corresponding legislation that applies. 

Becoming incapacitated without a power of attorney can significantly and negatively impact many areas of your life. If you are being treated for any health issues, your treatment may be delayed and your care may not be aligned with your beliefs or wishes. Another major consequence is that your property and finances may be left in limbo. 

To remedy this situation, one of your loved ones will need to file a guardianship application with the courts to give them permission to act as your guardian and handle your affairs. Alternatively, the Office of the Public Guardian and Trustee (OPGT) may also be appointed to act on your behalf. 

How much does a guardianship application cost? 

The cost of a guardianship application can vary. However, your costs will be significant – and many times more than the cost of preparing your powers of attorney. This cost can be especially burdensome for families who are already struggling to manage the expenses of a loved one or family member who is incapacitated.

Even an uncontested guardianship application (meaning one where no one has any objections) will cost several thousand dollars. Contested guardianship applications can cost significantly more, and the expenses can quickly add up. The costs of a guardianship application may include attorney fees, court costs, and other expenses related to the application process, such as a capacity assessment.

In addition to the financial cost, there is also an emotional cost to not having a POA. The stress and uncertainty of not knowing who will manage your affairs can take a toll on everyone involved. It can also lead to family conflict and legal disputes, which can be especially painful during a time of crisis.

To avoid preparing powers of attorney to save money now – only to pay much more later – would be penny wise, pound foolish.

Why everyone needs a power of attorney? 

We often think about estate planning as being a priority for the elderly. However, the truth is that we do not know what the future holds for any of us. The fact is, we want to protect our loved ones. We do want to make sure that our wishes are respected – not only if we pass away, but if we are alive and unable to make our own decisions. 

That is why we encourage you to have all of the essential legal documents prepared at the same time. The cost to prepare powers of attorney – especially if you prepare wills at the same time – is much lower than the alternative. And we cannot put a price on the peace of mind that comes from knowing that you have cared for your loved ones and your own future.

At Beeksma Law, we understand the importance of these legal documents and strive to make the process as easy and stress-free as possible. Our team will create customized legal documents – such as powers of attorney, wills, and trusts – that reflect your individual wishes. Contact our team today to get started.

Last Updated on October 29, 2023 by Shayna Beeksma

Disclaimer: This article on the difference between a will and a power of attorney is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.

When people think of estate planning, they think about their wills. When speaking to new clients, we ask, “Do you have a power of attorney?” 

The answer, more often than not, is no. In fact, only 40% of Canadians (and a mere 9% of those under 35) have drawn up powers of attorney. 

After all, is a will not enough? The answer is no, in order to protect yourself, your family, and your property, you need: 

• A will; 
• A power of attorney for personal care; and 
• A power of attorney for property. 

We outlined what those documents are here, but in this article, we will talk about how powers of attorney differ from wills. 

(Of course, if you would like to discuss any of your estate planning needs, please contact our office today). 

What does each document cover? 

Each document has a distinct purpose. 

Your will outlines your wishes and how to distribute your estate after you have died. An executor is appointed to ensure those wishes are followed. 

Both powers of attorney outline what happens if you are alive but incapable of making decisions for yourself. An attorney is appointed to make decisions on your behalf – you can have the same individual or choose different individuals for each power of attorney.

When do they go into effect? 

A will goes into effect when you pass away. 

Powers of attorney go into effect while you are still alive. When it specifically goes into effect depends on how your document is drafted. You can have it go into effect upon signing or upon becoming incapacitated. 

There are pros and cons to each. If your documents allow your attorney to act immediately, they will be able to make decisions on your behalf much more quickly. This can be handy if, for example, they need to access your bank account to pay your bills if you are incapacitated. If your documents require your attorney to prove that you are incapable, this can cause delays and have an impact on many areas of your life. 

However, allowing your attorney to make decisions on your behalf at any time comes with its own risks. Carefully consider your circumstances when preparing your power of attorney.

How are these estate planning documents prepared? 

You may have heard the term “holograph wills”. (In fact, we talked about them here.)

While there are certain requirements that must be met, you can have a legally binding, valid holograph will that is only signed by the testator (meaning there are no witnesses). However, there is no such thing as a “holograph” power of attorney. The Substitute Decisions Act requires that your power of attorney be signed by two witnesses. 

What happens if you do not have a power of attorney? What happens if you don’t have a will?  

We will cover this in more detail in our next article, but in many ways, it hurts you more to be incapacitated with no power of attorney compared to dying without a will. 

Distributing your estate if you die without a will (or die intestate) is governed by the Intestacy Act and outlines how your estate should be split amongst your closest relatives. Of course, this may not always be ideal, and it is always better to have a will in place. 

However, there is no corresponding legislation if you become incapacitated and do not have a power of attorney. You have then triggered a series of long, costly legal battles for your loved ones to handle. 

It is important that you fully protect your loved ones, no matter what happens.  

Understanding Your Will and Powers of Attorney With Beeksma Law

At Beeksma Law, we know that anything can happen at any time. We know you want your loved ones and your interests to be protected and that is why we work with you to create an estate plan that fits your needs. 

To learn more about getting started on these essential estate planning documents, contact our office today.