What You Need to Know About Appointing a Power of Attorney

Many people may worry as they get older about what will happen if they are no longer able to manage their finances and personal property. It can be a good idea to be proactive in planning ahead for a time when you may need help managing your affairs. One option available to Canadians to address this financial planning concern is appointing a Power of Attorney.

What You Need to Know

What Is a Power of Attorney?

Power of Attorney (POA) is a legal document that gives one or more persons the authority to manage your finances on your behalf. Once a person is appointed POA, they have the same decision-making abilities over your finances and property as you do. This includes bank accounts, investments, bills, real estate etc.  It’s important to understand that this does not mean they now own the property, only that they can make decisions regarding it. POA is limited, however, and they do not have the authority to make or change your will, change beneficiaries, or appoint a new POA. You have the ability to outline how the power of attorney can act. For example; you can limit them to having decision making abilities over only one piece of property.

It is possible to appoint more than one person as power of attorney. The acting POA’s can be required to make decisions together, or have the ability to act separately. This is something that is outlined in the power of attorney document. Unless you become mentally incapable you still maintain the same control over your finances and property.

Types of Power of Attorney?

There are two types of power of attorney when dealing with finances and property:

  1. General Power of Attorney – General POA gives someone the authority to make decisions over some or all of your property on your behalf. General POA only has this authority when you are mentally capable of managing your own affairs. POA ends immediately if you become incapable. Power of Attorney can come into effect when you assign them or on a specified date.
  2. Enduring/Continuing Power of Attorney – Enduring POA allows for the appointed attorney to have decision making power over your property when you are mentally incapable.

Choosing an Attorney

The person you assign as power of attorney should be someone you trust completely. This person could be a spouse, sibling, child, or other friend/relative. The minimum legal age for a POA varies from province to province. It is recommended to assign a substitute POA in the event your first choice is unable or unwilling to assume the role. It is important to note that in some provinces, POA’s are entitled to be paid unless otherwise specified in the document. Power of Attorneys must be able to manage your money in your best interest and keep detailed records on the decisions they make on your behalf.  Below are a few questions to ask yourself about the person you are considering appointing:

  • Does this individual have experience managing money and property? Do they do a good job of managing their own affairs?
  • Do you know this person well enough to feel that you can trust them?
  • Do they have any personal issues that may interfere with their ability to act in your best interest?
  • Does the individual understand what will be expected of them as your attorney?
  • Does this person have the time to manage your money or property as well as their own?
  • Is this person nearby and readily available to assume this role? Having someone that lives far away from you may cause issues.
  • Has this person willingly accepted their appointment as attorney?

Benefits and Risks


  • Makes it clear to family and friends who will be responsible for your money.
  • POA’s must manage your money for your benefit and can be required to account how he/she manages it.
  • Your Power of Attorney document can be as general or specific as you want giving you great flexibility over what assets your attorney would have control of.
  • The ability to have multiple attorneys can limit the possibility of someone taking advantage of you.


  • Can lead to mismanagement of your money if your POA turns out to be untrustworthy.
  • Sometimes people limit the abilities of the POA to the point that it makes it difficult for the POA to fully take care of your finances.
  • Appointing two or more POA’s can come with certain challenges. If the POA’s are required to act jointly then it is possible that they will not agree on certain decisions.
  • If your Power of Attorney is not up to date, it is possible that the person you appointed may be currently unsuitable for the role.

The Bottom Line

Appointing a Power of Attorney can be a good option for many people and gives them the peace of mind that someone will be able to help them with their money if there is ever a need for it. When appointing a Power of Attorney, it is important to work with a lawyer who can fully explain the legal document to both you and your attorney. You should never feel pressured by a relative or friend to sign a Power of Attorney.

It is also important to note that a Power of Attorney for Property is not the same document as a Power of Attorney for Personal Care. A POA for property will have no authority to make decisions regarding your personal care.  These are two separate legal appointments and they are not interchangeable.

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