“I think everybody should have a power of attorney, even if you don’t have family,” lawyer Stephen Ponesse recently told The Catholic Register. “In fact even more so if you don’t have family.”
It’s a matter of avoiding chaos on that inevitable day when a person is no longer capable of making important decisions. It passes that burden of decision making to someone more able.
It’s a simple idea, but a complex set of decisions.
“Basically (a power of attorney) allows someone to step into your shoes and act with respect to your property when you can’t do so for some reason,” said lawyer Jim Doyle of the firm Walsh, McLuskie and Doyle.
“These powers of attorney are dangerous in the sense that they allow a person to access your financial resources and do with it what they will,” said Doyle. “It’s very important to choose someone whom you trust. There’s a lot of elder abuse. There are situations where elderly people have turned over control of their finances to their son, daughter, nephew or niece — someone like that, sometimes even a housekeeper — and that trust has been abused.”
In fact, the Ontario Seniors’ Secretariat reports that between four and 10 per cent of older adults experience some form of abuse or neglect at the hands of someone they rely on or trust. Financial abuse is the most common elder abuse in Canada.
In 44 years of practice, Ponesse can’t recall a clear-cut case of abuse of a power of attorney, but it does happen and it’s an issue people need to be aware of when they sit down to lay out the legal framework for their final chapter — a will, a power of attorney for property and power of attorney for personal care.
“When you sign a power of attorney, it’s immediately a live document. It could be used,” said Ponesse. “When you sign a will, it has no effect whatsoever until you die. Clients and the public don’t really appreciate the difference between the two.”
More common than some dastardly plot by a greedy son or daughter are scenarios where siblings suspect the brother or sister who holds the power of attorney of either taking personal advantage or failing to make appropriate decisions, said Ponesse. Usually, it’s a problem of communication, he said.
“When there’s no communication you think they (the holder of the power of attorney) are robbing Mom or Dad blind,” said Ponesse. “It doesn’t mean there is abuse going on. I find I get more calls when someone is close to death, (complaining) because an elder sister is using this power of attorney improperly. It usually turns out they’re not using it improperly. There’s just a lack of communication there.”
You can encourage communication by naming more than one person to your power of attorney. Multiple powers of attorney can be named in two forms, either “joint” or “several.”
A joint power of attorney would require two signatures on every cheque or for the sale of your home, car, cottage, etc.
“For convenience, you probably want it several, so one person can act,” said Walsh. “But you also want the other person looking over their shoulder, checking and monitoring the situation.”
However, four or five people in on every decision is probably too awkward. If two children share the duties, there’s a good chance they will be communicating with the others.
One of the most common errors, when it comes to powers of attorney, is simply choosing the wrong person.
“The one thing you want to avoid doing is giving a power of attorney to somebody who is not going to be capable of exercising it,” said Walsh.
If you choose a friend who is now 70 years old and razor sharp, they might not be so sharp at 80 when it comes time to exercise that power of attorney. Somebody who has never made complex business or financial decisions may be overwhelmed when it comes to making decisions about someone else’s real estate, stock portfolio, business holdings and other financial affairs — a good friend perhaps, but not an effective steward of worldly goods.
The most common occasions for misunderstanding and conflict over powers of attorney have to do with just when they should be invoked.
“When you’re 89 or 90 and your son or daughter think you should be in a nursing home and you think you should be at home in your bungalow, there’s a conflict there and it’s better to control your documents,” said Ponesse.
Ponesse tells clients to inform their chosen power of attorney of the decision to name them and give them a photocopy of the document with the lawyer’s business card stapled to it. The photocopied document isn’t legally valid and can’t be used. The original document can be left with the lawyer or in a safety deposit box with a letter to the lawyer instructing that the power of attorney be released when a doctor or government assessor declares you incompetent in writing.
Powers of attorney aren’t limited to finances. And it may be the more important decisions to be made when you are incapable aren’t about your house, your bank account and your mutual funds.
Powers of attorney for personal care cover everything from when you should go to a nursing home and to which nursing home, to when the medical professionals should step back and let death happen.
In some cases, the person named to care for property will be the same person who is the power of attorney for personal care, though that’s a lot to ask of just one person.
“It’s the property person who would sign the cheque to the nursing home, but it’s the power of attorney for personal care who would decide what nursing home you go into,” explained Walsh. “Usually it’s the same person, but sometimes it’s split.”
The big issue in powers of attorney for personal care is end-of-life decisions. The most common mistake is the “living will” concept. When people start naming off various medical conditions and indicators and dictating which procedures and drugs will be permissible in various scenarios, they’re liable to end up with a document that is the opposite of clear guidance to the family or the medical team.
“It really gets to be ridiculous,” said Walsh. “My advice to clients is not to get into an extensive rule book on a living will. Get somebody you trust and sit down, have a conversation with that person about your wishes.”
If you can be sure that the person who holds your power of attorney understands your wishes in the most general sense, shares your values and religious convictions about the value of life, chances are you will get the decisions you would have made yourself.
“Any long, involved recitation about health care decisions is likely to be confusing. What you’re going to get is a debate between the doctor and the power of attorney and possibly other family members about exactly what the words mean,” Walsh said. “There will be different people with different interpretations. Then you start debating a document… Choose a person you trust. Sit down and talk to them. Discuss with them what your views are. Provide some guidance to the person.”
To whatever extent it’s possible, make sure everybody in the family knows what you’re doing when you name a power of attorney and encourage them to talk to each other long before difficult decisions have to be made, said Ponesse.
“When a person says they want to name their son as a power of attorney, I will then ask, ‘How many children do you have? Is there going to be a problem?’ ” Ponesse said.
Not having a power of attorney named well before you need it can be heartbreaking in terms of the potential for family conflict and expensive in terms of sorting things out while you lie in a hospital bed. Without a power of attorney, a provincial assessor may have to declare you incompetent and then appoint a public guardian and trustee.
“The family can get that power back, but you have to go to court,” said Ponesse. “That could cost you $5,000 or $6,000, at least.”
A public guardian simply may not be able to deal with all the issues as well as a family member or someone else who knows you well.
“My experience is that government does not do things well that require a one-on-one, personal, day-to-day relationship,” said Walsh.
Walsh sees too many clients who have waited too long before they sit down with him to deal with the issues of powers of attorney.
“There is a situation of it coming about too late,” he said. “Where the giver of the power technically may have the capacity to give the power of attorney, but they are not really capable of having the preparatory discussions with family.”
Both wills and powers of attorney require that you have the mental capacity, alertness and awareness to make decisions now, in anticipation of the time when such decisions will not come easily.
“The essence of a power of attorney is, ‘I need help and I trust this person,’ ” Walsh said. “The essence of a will is, ‘Here are all my assets — there’s this much money and this much property — and here are all the people I might consider, here are all the people who have demands on me or require my support, and in order to fulfill my obligations this is what I think I should do.’ ”
Power of attorney for personal care, power of attorney for property and a will are not tasks to be put off until you are old, frail and vulnerable. Carpe diem.