It’s time to close the POA gap.
That’s the name I give to the persistently lagging uptake levels for powers of attorney compared with wills.
Surveys of Canadians consistently find that around half of Canadian adults have a will in place. The stats for POAs – as you might expect for a document that is often overlooked and underappreciated – are a little harder to come by, but a recent RBC survey found that just 35 per cent had appointed a POA.
Even among wealthier Canadians, who are much more likely to have an estate plan in place, you see the same trend. According to Scotiatrust, as many as 90 per cent of affluent over-50s have a will, but less than 60 per cent of that group have a POA for property. And the number drops even further when you’re talking about a POA for personal care, where the proportion stands at just 53 per cent.
The frustrating thing about this disparity is that POAs are such an easy add-on to a will as part of a comprehensive estate plan. There are few documents that a lawyer can draw up less expensively than a POA, and none that come close in their importance to a client’s later life.
For most people, the main problem with POAs is that they don’t realize how much they need one until it’s too late. POAs are designed to kick in when a person becomes incapable of handling their own affairs, which means you need to have them in place ahead of time.
Once a person reaches the point of incapability, they can no longer sign a valid POA, which can leave family members in a very difficult position.
There are two kinds of powers of attorney under Ontario’s Substitute Decisions Act, which separates the functions between attorneys for property – who take responsibility for the grantor’s finances, bank accounts and other personal property – and attorneys for personal care, who handle decisions about health care, including nutrition, shelter, clothing, hygiene, and safety.
The same person doesn’t have to perform both roles, but each document carries extraordinary power, so make sure you choose people you have absolute faith in.
If you don’t already have them in place, do your bit to close the POA gap by asking your lawyer to draft POAs for property and personal care while they’re drawing up (or updating) your will.
An experienced estates lawyer can set the specific terms that work best for you, including exactly when the POA takes effect and even guidelines for appointees to follow in certain predictable circumstances.
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