Continuing Power of Attorney

If you’re caring for an elderly parent, it’s never too early to start planning for the future. One of the best ways to do this is to sit down together and create a Continuing Power of Attorney for Property, or a CPOA.

A CPOA is a legal document that will give you the power to manage and make decisions about your parents’ finances on their behalf.

If you don’t have legal experience, putting together a CPOA might seem a bit daunting. In this video, we’ll walk you through a few important facts about CPOAs that will hopefully make the process easier to understand.

The first thing you need to know is that CPOAs and wills are not the same thing. A Power of Attorney is a document that covers a person while they’re alive. Once that person passes away, the CPOA is no longer valid, and a will becomes the main document for managing their affairs.

If your parent does not have a will, the two of you should get one made as soon as possible.

You should also be aware that a CPOA is not the same thing as an advance care plan. An advance care plan outlines your parent’s wishes regarding their personal care, and, although important, it is not a legal document.

Another important fact about your parent’s CPOA is that the term “property” refers to their financial assets. People sometimes think they don’t need a CPOA because they don’t own any property. But if you’re planning to manage your parent’s money at all, including helping them pay their bills, you need to have one.

Your parent’s CPOA can be either general or limited. General gives you wider power to deal with their assets, and limited specifies a time or a purpose. For example, if your parent spends their winters down south, they can appoint you to manage their property in Canada while they’re away.

Although a CPOA will allow you to manage your parent’s finances if they become mentally incapable, in order for it to be valid it must be completed while they still have mental capacity. If there is any question about their mental capacity, they will need to be interviewed by a capacity assessor designated by the Ministry of the Attorney General.

The standard of mental capacity needed to make a CPOA is actually quite high, so the sooner you and your parents get started the better.

If they are deemed to be not mentally capable, you will need to file a formal request for power of attorney with the Office of the Public Guardian and Trustee.

You should also be aware that banks do not always honour a legitimate CPOA, so it’s important that you and your parent meet with their bank manager to discuss it while your parent still has their mental capacity.

The person who takes over under your parent’s CPOA, most likely you, will be known as their “attorney”. Don’t worry, you don’t need to be a lawyer to fill this role.

If your parent wishes, they can appoint more than one attorney to manage their finances. If they decide to do this, it’s important to specify whether their attorneys can act individually or whether they must act jointly. Depending on the situation, having to act jointly may help prevent any abuse of your parent’s finances, but it can also make it challenging to come to effective financial decisions on their behalf.

Powers of attorney are governed provincially, so you may have trouble if you try to use your parent’s CPOA in a province other than the one where it was made. It may be possible to have the CPOA validated by another province, but you should seek legal advice before attempting to do so.

Although a CPOA doesn’t have to be completed by a lawyer, it is a legal document, so it’s a good idea to get a lawyer’s help. Many lawyers offer package deals for the completion of a CPOA and a will at the same time. If cost is an issue, you may be able to get free help from a community legal clinic or apply for legal aid from the government.

As your parent’s attorney, you have a fiduciary duty towards them. This means that you’ve got an obligation to make decisions that are in their best interests. Remember that even though you may be handling your parent’s money, you can’t just spend it however you want.

In fact, if your parent wishes they can ask for a full accounting of the financial transactions made under their CPOA.

You might be relieved to learn that as your parent’s attorney, you are not personally liable for any of their financial obligations. However, if you and your parent have set up a joint account, you may end up having to pay any debts associated with this account even if they aren’t yours.

Still feeling confused about CPOAs? We don’t blame you; there’s a lot of information to learn. As we mentioned, your best bet is for you and your parent to work together on their CPOA with an experienced lawyer. We’ve also included a Care Guide below for you to refer to for more information.

By creating a CPOA you’re helping your parent prepare for their future, and ensuring that, whatever happens, their finances will be in good hands.

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