Recently, a friend was teary as she told me about a sudden change in her mom’s health. When I asked if she had power of attorney for her mother, her answer was a resounding “no way.” Her mom was procrastinating on seeing a lawyer to draw up necessary documents to protect her future.
Are you procrastinating, too?
According to the brochure “What every older Canadian should know about: Powers of attorney and joint bank accounts,” power of attorney is a written, legal document authorizing one or more persons to manage your money and property on your behalf when you are unable to do so.
In most of Canada, the person you select is called an attorney, but that person is not required to be a lawyer.
I am not a lawyer and do not give legal advice. I am a certified farm family coach who is seeing more frequent despair over aging parents who are not taking care of their affairs.
My view is: Power of attorney should be established while everyone is of sound mind and mentally capable.
So how do you decide?
One option is an enduring or continuing power of attorney that provides decision-making power to your designate for some or all of your finances and property. This can take effect as soon as you sign it. In some cases, it is possible to have POA come into effect only when you become mentally incapable, if this was specified in the document.
Choose wisely
It is important to choose your person wisely to protect against financial abuse. Some people choose two or more designates, believing it could reduce the chance of misuse.
Here’s what the power of attorney brochure suggests for choosing well:
- Personal stability. Does the person know how to manage money and property well? Will they do it with your best interests in mind?
- Trustworthiness. Has this person always been open and honest with you? Do you trust them? Do they have personal financial issues that may interfere with proper management of your finances? Assess their trustworthiness. Ask questions.
- Experience. Does this person understand financial matters? Farms are complex businesses. Our son was 29 when he used power of attorney for his father while his dad, my husband, was laid up in trauma care after a truck accident in 2017. Who is capable of running your farm when you are in hospital?
- Availability. Does the person have the time to handle your financial affairs and property as well as their own? Do they live nearby and easily accessible?
- Reliability. One of my hot conflict buttons is people who say they will do things and then don’t follow through. Can you rely on the person you’re considering? Do they have a track record of carrying through on important decisions or duties in the past?
- Willingness. Has this person agreed to take on the responsibility? Do they clearly understand your expectations? It is important to make sure the designate is willing to learn their duties and legal responsibilities.
Things to consider
Lawyers can help draft power of attorney documents, and you can also talk to them about the steps needed. Things to discuss include:
- The different types of POA
- When you’d like it to start, and what the options are for changing or ending it
- Whether you want your designate to have authority over all or just of some your financial matters including bank accounts
- How many people you want to have power of attorney
- Whether you want a substitute appointed in the event your designate is no longer able to act for you
- Whether you want regular updates from your designate to see if things are being managed well
Banks may also ask you to sign POA forms, so check with your lawyer to confirm the document you’ve drawn can be used for banking purposes.
When you have a joint account at the bank or credit union, ask what happens if the other account holder dies. Make sure you fully understand the consequences of a joint account before making any decisions.
Whew! Lots to consider.
We are farmers. We can do hard things. The financial abuse of aging folks, many of them women who haven’t had financial transparency on the farm, must stop.
Many aging farmers deal with memory loss. Be proactive and get power of attorney in place while your mental capacity is still good.
This is not a “do it yourself” exercise. Get your lawyer to assist and validate the document. Update your will at the same time.
