Legal Brief for February, 2010

The Power That Endures

A major concern that we all have is what will happen if we become infirm or incapacitated in some way by an illness or medical condition.  Will someone be able to do my banking?  Pay my bills?  Make sure my investments are monitored?  These are all important concerns.

Married couples will likely have a number of arrangements in place that allow for their spouse to do certain things for them.  These may include having a joint bank account, or having investments set up in both names (such as a GIC).  In such cases the spouse will be able to carry on and look after whatever needs to be done.  However, there are going to be some things which a spouse does not have the right to deal with, such as investments in the other spouse's name only (mutual funds or stocks for example) or the transfer of any ownership rights in real estate.  A person who is not married may not have any assets owned jointly with anyone else, and thus will be without even the basic protection noted in the case of a joint bank account.

One way for anyone to deal with this issue is to sign a document known as a power of attorney.  Simply put, a power of attorney is document by which you appoint someone else to act for you in respect of property and financial matters.  It is your authorization to the world to allow someone else to deal with your money and your assets.

A standard power of attorney document has a very significant drawback - it becomes automatically void if the person who makes it becomes incapacitated.  Just when you would likely most need to have someone looking after things for you, that power is taken away.  One solution to this problem that many people resorted to in prior years was to have a Trusteeship Order granted for the person under the Dependent Adults Act.  That however was a cumbersome, time consuming and expensive process.

Fortunately we now have a much more practical solution to the problem - that of signing what is known as an "enduring power of attorney".  An enduring power of attorney is signed while the maker is in full command of their physical and mental faculties.  It is expressed to take effect only if at some point in the future the maker becomes incapacitated.  At that point it springs into legal life so to speak, and becomes fully effective.  It then "endures" through the time of incapacity of the maker, avoiding the pitfall of a regular power of attorney.

Many people choose to have an enduring power of attorney prepared at the same time as their Will, along with a third document known as a "personal directive".  Having all three documents in place provides a person with a solid legal support structure to take care of the critical things in life if misfortune or illness should happen to strike.

For more information on Enduring Powers of Attorney and Personal Directives, please go to the Client Services section of this website, and click on the appropriate link for each item.

Notice To Reader:

Please note that this Legal Brief Of The Month feature is intended to provide general information only, and is not intended to provide specific legal advice for any situation.  You should consult with a lawyer before acting on any matter that you are facing.  Your use of, and access to this website, does not create a lawyer-client relationship with John K.J. Campbell, Barrister & Solicitor.